High Confidence Masks Deep Strategic Shifts
While mid-to large cap manufacturers with a global presence report high confidence in their ability to navigate uncertainty, their actions suggest a reactive posture driven by geopolitical risk. Our survey of 35 manufacturing CEOs shows optimism for business expansion has fallen sharply since the beginning of the year (from 63% to 49%), and a steady majority (57%) are actively relocating or restructuring their supply chains.
Key insights:
- Mid-to large cap manufacturing CEOs retain overall confidence, although uncertainty in conditions rises 7%
- 50% of manufacturers are targeting the U.S. for relocation, up 20% from January 2025, with risk management and government incentives growing in top drivers as delivery speed and customer demands fall in prioritization
- Capital investments are expected to increase for technology and automation, supply chain optimization, R&D (+18%), and Infrastructure (+11%), with the last two showing a major surge since May
“Continued global uncertainty and tariff turmoil eroded some of the optimism seen early in 2025,” noted Stephen Gold, President and CEO of Manufacturers Alliance. “However, confidence remains and manufacturers are looking toward long-term investment, particularly in technology, to weather this current environment.”
Business Expansion Outlook Shrinks
Source: Manufacturers Alliance CEO survey, January and September 2025.
CEOs Confidence Holds for Remainder of 2025
Source: Manufacturers Alliance CEO survey, January and September 2025.
Unresolved Expectations
Manufacturing CEOs remain closely attuned to unpredictable market dynamics, as the industry continues to respond to external pressures. The top among these is general economic and global market volatility, anticipated changes in tariffs, and fluctuations in commodity and raw material prices – all consistently ranked as the top three areas of concern.
Given the long-term impact and high exposure to tariffs, manufacturers are proceeding with caution, despite continued momentum.
Beyond these primary concerns, CEO rankings revealed several notable shifts. Cyber threats rose to fourth place, followed by domestic political instability and the inability to enact critical public policy, which moved into fifth. Keeping pace with advances in artificial intelligence climbed to sixth.
Shifts in the Top 10 Hot Topics Ranking for September 2025
Note: Number in parenthesis reflects the ranking from May 2025. Source: Manufacturers Alliance CEO survey, May and September 2025.
Investment Focus Shifts
Companies are placing their future bets on technology. Capital investments are expected to increase for technology and automation (71%) and supply chain optimization (46%). Additionally, infrastructure and facilities and R&D both saw a major surge of 11% and 18% since May. Conversely, the outlook for increased investment in Workforce Training and Development has dropped significantly (-16%), showing a strategic decision to prioritize automated efficiency and innovation.
Capital Investments Show a Shift in Priorities in Next 12 Months
Source: Manufacturers Alliance CEO survey, May and September 2025.
According to reporting from the Tax Foundation, U.S. GDP is projected to decline by 0.8% over the next decade due to changing tariffs. Given the manufacturing sector’s high exposure to tariffs on inputs, the top two business impacts identified are increased cost pressures and the need for supply chain restructuring.
Cost increases were cited as the most significant short- and long-term challenge, with 80% of CEOs ranking it as their top short-term concern. Supply chain restructuring closely followed, with 57% of CEOs actively taking steps to adjust their supply chains in response.
Most Significant Impacts of Geopolitical Developments and Tariffs for Companies
Source: Manufacturers Alliance CEO survey, September 2025.
Changes in Sourcing and Supply
Half of surveyed CEOs are focusing in on the United States as a relocation target, followed by Mexico and India. Earlier this year, customer demand and quality control were impactful in the decision-making process for sourcing location, coupled in the rise of localization and customization growth. As of September, they both dropped significantly and now sit as the lower concerns, with reduced risk (71%) and government incentives/disincentives (59%) growing in their level of impact.
CEOs Continue to Relocate Sourcing
Source: Manufacturers Alliance CEO survey, January and September 2025.
Primary Drivers in Relocating Sourcing
Source: Manufacturers Alliance CEO survey, May and September 2025.
Relocation Targets Being Considered for Raw Materials and Components
Other includes:
- Taiwan
- Eastern Europe
- Brazil
- Cambodia
- Canada
- SE Asia
- Indonesia
- Malaysia
- Turkey
Source: Manufacturers Alliance CEO survey, September 2025.
