The Top 10 Global Manufacturing Trends of 2025

What are the biggest Manufacturing Trends of 2025?

2025 is poised to bring amazing new solutions and possibilities to the manufacturing industry. While the global industry is still feeling the effects of a less-than-optimal supply chain and a worker/skill shortage, more and more companies are working to solve these problems proactively.

For this reason, 2025 will bring a strong push towards advanced technology like AI, the smart factory, microfactories, digital transformation, and the industrial metaverse. At the same time, companies will need to stay up to date on workforce trends and maintain their employees during a wide labor shortage.

Even though we can never fully see the future, there are strong reasons to be excited about the road ahead and even stronger reasons to be prepared for it.

In many ways, the manufacturing trends of 2025 do not stand alone. In fact, they are dictated by the years that came before them. And since we are halfway through the current decade, it will be useful to take a look at what has happened in the past 5 years, and how it has shaped the beginnings of 2025.

To help you pursue optimal growth in the next year, let’s explore the top 10 biggest global manufacturing trends for 2025.

Manufacturing Trend 1. Attracting & Retaining Talent to Curb Labour Shortages

Perhaps unsurprisingly, our first two manufacturing trends of 2025 concern the workforce, or to put it correctly, the absence of available employees in the manufacturing industry. But surprisingly, this problem is somewhat related to its recent growth and success.

In a 2024 analysis from Deloitte, the US manufacturing industry’s employment has risen to almost 13 million, finally surpassing pre-pandemic figures. And the good news doesn’t stop there. The number of manufacturing companies across the US has grown by 11% while spending on new or expanding manufacturing sites has nearly tripled in the past five years.

These figures show the industry’s incredible ability to reverse the effects of the pandemic and push forward towards a new future.

However, the manufacturing industry’s unprecedented growth is causing some issues of its own while exacerbating some ongoing challenges.

• Lack of workers amid the growing number of positions: Manufacturing positions are growing faster than the number of people working or entering the industry, leaving companies with high turnover rates and a lack of skilled workers for various positions.
• The skills gap: While the skills gap was already an issue before the pandemic, it has now been intensified by the growing number of positions. Manufacturers are looking for a wide gamut of people to fill entry-level jobs, skilled engineering positions, and even leadership roles.

In light of these challenges, manufacturers are looking for strategies to attract and retain their workforce. In a recent survey from NAM (National Association of Manufacturers), over two-thirds of respondents said retaining and attracting employees was a top priority for their business in 2025.

To combat this challenge, manufacturers are focusing on improving their employees' experience, providing workers with three key offerings.

• Flexible work arrangements: In a study by Deloitte, 47% of respondents said that providing flexible work arrangements has been the most impactful action they’ve taken to retain their employees. For companies looking to the next generation to supply their workforces, Forbes reports that Gen Z places a high priority on mental health and well-being, stating that providing these could be the ticket to securing the next generation of workers.
• Upskilling opportunities: In the same Deloitte study, over a third of respondents stated that offering training and upskilling opportunities to their employees has helped them retain their workforce. This has proven to be a useful tactic since workers feel that their careers are less stagnant when opting to stay with their current employer.
• Adoption of new technologies: Similarly, the adoption of new technologies is helping to transfer valuable legacy knowledge to the next generation. And with Gen Z’s affiliation and aptitude for technology, companies can expect greater employee retention when investing in digital transformation.

Manufacturing Trend 2. Training, Upskilling, & Reskilling Employees

While maintaining employees is a top priority for the industry, companies still have to deal with the manufacturing skills gap, where even their current employees are not qualified to perform new and evolving tasks.

This problem then leaves companies with only one option, hiring more workers.

But this puts us back at the problem in our first manufacturing trend above. Furthermore, the cost of replacing one skilled worker in the manufacturing industry is stated to be between $10,000 and $50,000 USD. This statistic shows that organizations can save a lot of money if they can reduce their turnover and bring their current employees up to speed.

If you can’t find workers that are qualified, you have to qualify your existing workers.

In the past, this would have been difficult since it would take years to get new hires working at the same level as experienced or senior workers. If turnover rates are at an all-time high, workers may not even get the chance to become senior-level proficient before moving to a different company.

Companies will need to take a serious look at upgrading their training, upskilling, and reskilling capabilities, making this trend a top business priority in 2025. For this reason, we will see serious investment in smart manufacturing technology that aids training and educational opportunities for the workforce. LMS and work instruction platforms are at the forefront of this movement since they can quickly and effectively standardize processes and procedures while expediting training curriculums.

Stanley Black and Decker has committed to closing the skills gap within their workforce by reskilling 10 million of their manufacturing employees by the year 2030.

Manufacturing Trend 3. AI’s Takeover of Manufacturing

Ok, woah there, AI, is not taking over anything. But it is steadily enhancing the way we produce products and view data and will continue to be a major manufacturing trend in 2025 and beyond.

AI (Artificial intelligence) continues to be a huge topic for the industry, making it more of a manufacturing trend of the decade rather than just 2025. In many ways, AI is still in its fledgling phase but is poised to grow at an astounding rate in the coming years.

While AI was introduced to the manufacturing sphere in the previous decade, many AI-related projects were stuck in a so-called “pilot phase”. A manufacturing survey in 2020 revealed that while 79% of respondents were exploring the implementation of AI within their productions, only 21% had implemented the technology as a regular part of their productions.

But now, AI has exploded, and the industry is changing with it.

In 2024, a customer experience report found that 55% of surveyed industrial product manufacturers were already incorporating AI tools into their operations. And of those respondents, over 40% plan to increase investment, signaling continued demand for AI and growth of AI applications within the industry.

To flesh out how large AI will likely become, it is expected that the global manufacturing AI market will hit approximately 230.95 billion by 2034, growing at a CAGR of 44.2%. AI is becoming fairly ubiquitous across the manufacturing industry as automotive, electronics, aerospace, and other manufacturers use AI to help design products, streamline production, and analyze data.

In 2024, ABI Research estimates that manufacturing and other industrial enterprises will generate about 4.4 zettabytes (4.4 trillion gigabytes) of data by the year 2030. Given the sheer amount of data being generated, companies will need to turn to AI-powered analytics to organize all the data.

AI-powered analytics and machine learning provide manufacturers with the capability to automatically detect trends in machine use, predict machine failure before it happens, and optimize production and material usage.

Manufacturing Trend 4. Digital Transformation & the Smart Factory Remain a High Priority

Despite the past five years bringing a certain level of economic uncertainty to the industry, investment in digital transformation and smart manufacturing technology continues to be on the rise. And this comes as no surprise. Manufacturers see the adoption of smart factory technology as one of the best ways to mitigate costs while advancing the capabilities of production lines.

With a growing emphasis on technology in manufacturing, the Industry 4.0 market is expanding. Valued at $114.3 billion USD in 2023, it's projected to grow at a CAGR of 20% from 2024 to 2030. This is further evidenced by a recent 2024 analysis from Rockwell Automation where technological investments in manufacturing comprised an average of 30% of surveyed companies’ operating budgets.

Smart factory technology enables manufacturers to integrate a super advanced automated network of machines, systems, and people that intuitively work together to achieve higher levels of productivity and efficiency while significantly reducing production costs.

The smart factory gives manufacturers access to real-time data and complete visibility of their operations, creating a more flexible and responsive production environment. And with the rising costs of materials and a volatile global supply chain, smart factory technology is proving to be the solution for many manufacturers.

For this reason, in 2025 we will see an increase in smart factory technologies that are designed to integrate with other systems and centralize data flow. Progressively, companies are weaving a resilient digital thread throughout their operations with manufacturing systems and operations powered by IoT devices, PLCs, cloud computing, and APIs (Application Programming Interface). This technology allows ERPs, BI software, digital work instructions, machine monitoring software, and other cyber-physical tools to communicate effectively.

Manufacturing Trend 5. Continued Elevated Costs for Supply Chains

Since 2020, supply chains have experienced some volatility and elevated costs which have not yet receded to pre-pandemic levels. And manufacturing companies are feeling it. In a recent study from NAM, over a third of surveyed companies stated that transportation and logistics costs would be a key challenge in the latter half of 2024. And sadly, 2025 will continue to uphold this trend with a host of causes.

• Inflation: The cost of labor, transportation, and raw materials has increased due to high rates of inflation. In the same survey from NAM, respondents expect wages and raw material costs to increase by another 2.7%
• Labor shortages: Labor expenses may increase due to a lack of truck drivers, warehouse employees, and other essential staff. In mid-2024, a survey of manufacturing professionals reported that over 80% of respondents said employee turnover had affected their production and supply chain.
• Supply chain disruptions and shipping delays: Geopolitical tensions, attacks on cargo ships, port traffic jams, and production hold-ups have led to worldwide shipping delays, compounding already high supply chain costs.
• Government policy changes: 2024 saw 72 elections with 3.7 billion voters worldwide, leading many businesses with a good incentive to wait and observe geopolitical tensions, trade legislation, tariffs, and industrial policy. For example, on-shoring (also known as re-shoring or near-shoring) in recent years has led to Mexico becoming the primary trading partner of the US.

While the industry tries to resolve these problems and uncertainties, the cost is affecting the consumer, creating more waves of unpredictability in the market and supply chain. Despite these challenges, manufacturers are working hard to combat the issue head-on with 3 key strategies.

• Diversifying suppliers: To mitigate unwanted gaps, manufacturers are working to create redundancies within their supply chains. When materials cannot be sourced or accessed from one supplier, the company has other pre-established suppliers to fill in. This redundancy safeguards companies from proverbially putting “all their eggs in one basket”.
• Strengthening relationship management: To properly manage diversified suppliers in 2025, companies will need to create good relationships with suppliers. These strong relationships can help find new solutions to material shortages, new trade routes, and foster quick access when materials are available.
• Enhanced digital technologies: Companies are turning to digital technologies to help them effectively diversify and strengthen their relationships with suppliers. Using work instruction software and the VKS Digital Ecosystem, manufacturers can share key knowledge with suppliers while ensuring that material/component quality is at its highest level before it reaches the manufacturing floor.

Manufacturing Trend 6. Increase in Onshoring and Localized Production

Although it may seem like the events of the global pandemic are long behind us, manufacturers continue to look for opportunities to tighten and localize their logistical networks. And with the ongoing war in Ukraine and Palestine, supply chains are poised to experience continued volatility.

Before the events of 2020, cheap labor used to be the focus of the industry, compelling many companies to cut costs and outsource labor to other countries. The inexpensive labor was worth the increased transportation costs and additional lead times. However, this was only acceptable because of the regularity of the past supply chain.

Now, with the supply chain experiencing long-term unpredictability, we are seeing businesses give up their offshoring operations in favor of dependable transportation and supply chain autonomy. Plus, traditional outsourcing markets like China have seen their workers' wages triple in the past decade, leaving less incentive for global companies to invest in offshoring operations.

Over the past few years, governments have also been getting involved to help move production to North America.

• CHIPs and Science Act: Poised to increase semiconductor investment and production in the US with the goal of creating a more sustainable and resilient semiconductor supply chain in North America.
• Inflation Reduction Act (IRA): Among other goals, the IRA incentivizes domestic manufacturing through tax credits to regain lost manufacturing operations.
• Infrastructure Investment and Jobs Act (IIJA): While not specifically about manufacturing, the IIJA includes funding for advanced manufacturing facilities and advanced technologies, such as AI, IoT, and Robotics.

By returning production to their home countries and/or moving production closer to their intended market, companies can take greater control of how they source their materials and how they manufacture their products.

The 3 major benefits of onshoring are:

• Lower transportation costs: The major cost-saver of onshoring is through reducing the distance the product needs to travel. In the past few years, US automotive manufacturers like Ford and Tesla have progressively been establishing their own domestic supply chains for this very reason.
• Decreased lead times: Less transportation also means faster lead times, meaning that companies can bring their products to market sooner, potentially beating out competitors with offshore operations.
• Enhanced quality control: When production is closer to the base of operations, companies can implement greater oversight and ensure precise quality and consistency.

What if your work instructions could communicate automatically with machines and devices on the shop floor? that intelligently connects digital work instructions with machines, devices, sensors, and PLCs to create integrated workflows between people and their environments.

Manufacturing Trend 7. Microfactories Provide the Next Level of Agility

With the manufacturing trends of 2025 highly focusing on advanced technologies and the problems with the global supply chain, it is reasonable to see companies implementing one trend to solve the other.

This is exactly what has happened regarding microfactories.

Microfactories are small yet highly modular operations that quickly adopt advanced technologies, such as AI, IoT, Big Data, robotics, and automation to create an agile yet cost-effective production.

Traditionally, large factories are only efficient if working at full capacity, not to mention, they are often complex, require enormous investment, and are slow to start and innovate. While large-scale productions (gigafactories) still have a firm standing as powerhouses within the industry, microfactories could be the solution to a few of the above problems.

By building smaller-scale smart production cells that are equipped to build a wide range of products at lower volumes, companies can quickly shift production to their exact needs when they need it. At the same time, microfactories allow companies to expand production in smaller yet more manageable steps. These smaller factories do not require as much investment or business to be profitable as is the case with gigafactories.

Additionally, since these microfactories do not require vast amounts of real estate, production can take place closer to city centers and target markets, reducing lead times and providing companies with greater population pools for their workforce.

However, while microfactories present a lot of benefits, they do come with their own set of unique challenges. Namely, coordinating and maintaining standards across multiple sites can be difficult. Not to mention, as each site targets a different market, product lines and customizations can also be an added complexity when striving for a global standard.

There is a solution though. Advanced technology like interactive and visual work instructions can be a key part of running multiple micro-factories successfully as they empower manufacturers to adopt modular and scalable productions. Workers follow standardized step-by-step guides to complete the task correctly every time while the work instruction gathers valuable production data.

Adding to this, companies can use work instruction templates to update key processes instantaneously across multiple locations, all the while allowing local productions to keep their unique market-driven procedures in check. These digital guides become dynamic to the needs of each work order, supplying employees with the exact knowledge they need to get the job done right at any moment.

Manufacturing Trend 8: The Industrial Metaverse Will Bring New Cyber/Physical Worlds

The industrial metaverse combines smart factory and digital twin technology to create an immersive virtual or virtual/physical environment. These environments are accessed using Virtual Reality (VR), Augmented Reality (AR), and/or Mixed Reality (MR) systems.

In theory, an infinite amount of people and systems can inhabit and share a virtual space where they can communicate, work, and even play. And the manufacturing industry is excited about the possibilities of this new technology.

In a 2023 study, the majority of respondents stated that they had made significant investments in technologies toward the industrial metaverse. In 2024, Statista reported that by 2030, the metaverse market is anticipated to reach a projected volume of $507.8 billion USD, growing at an expected CAGR (2025-2030) of 37.43%.

Companies can create a rich immersive digital environment to showcase a product, service, or even a process within a factory.

• If using AR technology, a person could walk through a physical space while a digital environment is layered over top.
• If using VR technology, the user explores a virtual environment that they observe, move, and interact with, potentially in ways that would be physically impossible.
• If using MR technology, digital and physical elements interact with each other in real time.

Each option provide companies with a space where anything is possible and the cost of interaction and tests are virtually nothing.

Using the industrial metaverse, users anywhere in the world with an internet connection can tap into the metaverse and virtually “walk through” the product and information being showcased. The industrial metaverse presents global teams with the ability to work and collaborate within one environment, serving to close the physical distance between companies and connect the manufacturing world like never before.

Manufacturing Trend 9. Big Data Grows Exponentially

Companies are not only investing in new technologies that boost productivity. Manufacturing companies are also investing in tools that allow them to generate and capture huge amounts of data, often referred to as Big Data.

An incredible advantage of a digital mode of operations is the opportunity to acquire massive amounts of data and then use this data to innovate and optimize production. This data is often so large and/or complex that it needs to be analyzed computationally to acquire accurate results that reveal patterns, trends, and correlations.

The Big Data industry has been growing exponentially, so much so that it has surpassed projections from the beginning of the decade.

In 2019, the Big Data market was evaluated at $904.65 million USD and was expected to reach 4.55 billion USD in 2025. But now, the market is expected to grow from $74.83 billion in 2024 to $94.86 billion in 2025 (CAGR of 26.8%).

Big Data enables manufacturers to gain insights into their operations and their supply chains like never before; empowering companies to evolve and improve faster than in previous generations.

Big Data provides knowledge, and knowledge is power.

But herein lies a problem. With so much data coming in, manufacturers can get bogged down in too much of a good thing, unable to decipher the valuable information coming in.

Companies wishing to fully utilize their huge swaths of data will need to leverage data computational tools such as Business Intelligence (BI) software and/or data analytics platforms, both of which can now be powered by AI.

To generate valuable data, companies can integrate frontline systems that gather data from every action and interaction on the shop floor. While the data is compiled neatly, companies can also connect their systems automatically with their BI software to organize and visualize their quality traceability, operational insights, and custom integrations. By installing software that captures key data, your operations and supply chain are like an open book. You can gather insight and knowledge that previous generations could only dream of.

Manufacturing Trend 10. The Push for Clean Manufacturing

With the ever-increasing focus on climate change, manufacturers will continue to make efforts to enact greener operations and achieve carbon neutrality. With hurricanes and other natural disasters on the rise in the past decade, there is good evidence pointing to climate change as a contributing factor to supply chain disruptions.

Consumers are weighing in on this manufacturing trend of 2025 by looking for companies that are making strides toward greener production. Product labels that inform consumers of the environmental impact of a product will serve as powerful decision-making factors.

A recent survey found that 72% of respondents said that they are actively looking for environmentally friendly products. Another study conducted by PwC found that 80% of respondents are willing to pay more for sustainably sourced products. In the same study, some of the respondents were willing to pay as high as 9.7% more for eco-friendly brands.

While consumers are ready to vote with their wallets, companies are taking notice, albeit, slower than in previous years.

With the recent US elections and 2025 being a super year for elections worldwide (over 3.7 billion voters in 72 countries), manufacturing companies are more likely to slow down their clean manufacturing actions and wait to see if there are government incentives to the approach.

However, while carbon neutrality and electrification investment is lower than it was in 2023, a recent investor report found that it is still a major priority for manufacturing companies going into 2025.

Additionally, as more and more companies embrace the benefits of digital transformation, they are progressively turning to paperless solutions. This has been a major contributor to decreasing the carbon footprint of many companies within the industry.

There are also technological opportunities for companies to tighten up their supply chains, even if suppliers are on the other side of the world. Using work instruction software, companies can , ensuring that all materials and equipment are up to snuff before they get shipped. Plus, with instant translation powered by AI, companies can instantaneously share their process requirements with any supplier in any language.

The Future is Bright

Despite the labor shortages and supply chain disruptions that are still dictating the manufacturing trends of 2025, the industry is facing these challenges head-on with new technologies and targeted action plans.

If we have learned anything from the course of the past 5 years, it is that the manufacturing industry is constantly evolving and improving. Companies need to be prepared for a new era that seizes the opportunity for advancement and growth.

So let’s keep this going! Now is the time for smarter technology, resilient connections, and greater opportunities. After all, this is 2025; new levels of innovation and flexibility are the industrial standard.