Laurie Harbour
Partner

Manufacturing Outlook for 2026: Challenges and Opportunities

Let’s be honest: 2026 will be another tough year for manufacturing. Tariffs, high costs and economic uncertainty will stifle growth. But it will not be a repeat of 2025. This slower year gives you a chance to focus on what you can control, such as efficiency, data and sales, in order to build a stronger business.

Key Trends to Watch

• Weak Economy: Growth remains sluggish outside of artificial intelligence (AI). Manufacturing is flat, with high interest rates adding pressure.
• Tariffs: Expect them to stick around. Even if courts limit presidential authority, alternative statutes will keep tariffs in play.
• Rising Costs: Labor and materials are more expensive. Many firms are still hiring for growth that is not happening.
• Limited Capital Investments: High costs mean prioritization is critical.
• Tax Opportunities: New incentives for R&D, bonus depreciation, and qualified production property can help offset losses.
• Technology and Automation: Digital tools and AI can improve efficiency, but data readiness is key.
• USMCA Review: July negotiations could ease or worsen trade barriers across North America.

How to Adapt

1. Focus on What You Can Control: Improve operational efficiency, organize data, and strengthen sales. Revisit cash-flow strategies and consider advisory support.
2. Leverage Tax Incentives: Work with your tax advisor to maximize savings from new rules.
3. Smart Tech Investments: Upgrade systems only where ROI is clear. Prioritize data integration and cybersecurity.
4. Optimize Sales: Streamline your process and explore new verticals to expand your customer base.
5. Upskill Your Team: Prepare for digital and AI tools, improve retention, and meet compliance requirements for contracts.

Bottom line: 2026 will be challenging, but proactive manufacturers can turn it into a year of transformation.

See also: Wipfli LLP, Wipfli LLC

Technologies: Management

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