Mid- to large-cap manufacturing CEOs entered January 2026 with confidence levels remarkably similar to those reported in January 2025 regarding their ability to navigate uncertainty. Notably, fewer leaders now describe themselves as unconfident, suggesting steadier executive poise amid ongoing volatility.
However, resilience does not equate to optimism. A majority of CEOs continue to express concern about economic conditions over the next 12 to 18 months, underscoring a cautious but controlled posture as they guide their organizations forward.
Key insights:
- Confidence is holding—and expansion is rebounding. Despite continued economic concern, 64% of CEOs expect business expansion in 2026, up 19 points from mid-2025, reflecting cautious optimism.
- Sourcing relocation remains active—but more strategic. A majority are still relocating supply chains, while reliance on government incentives has dropped sharply, signaling longer-term repositioning rather than reactive moves.
- Capital is shifting toward growth priorities. Investment is rising in infrastructure and R&D, while supply chain spending cools, indicating a pivot from defensive adjustments to forward-focused expansion.
“Our latest outlook found that manufacturing CEOs are more confident weathering global uncertainty,” added Stephen Gold, President and CEO, Manufacturers Alliance. “While the environment has not stabilized, companies have adapted to the 'new normal’ by shifting supply chains and refocusing on growth activities to manage within this environment.”
Expansion versus Contraction Signals
Business Expansion Outlooks Rebound After Mid-year 2025 Low
Source: Manufacturers Alliance surveys, January 2025, May 2025, and January 2026
Manufacturing CEOs report a meaningful improvement in expansion expectations. Outlooks for business growth increased 19% compared to May 2025, aligning more closely with the stronger sent.iment seen in January 2025. At the same time, expectations for contraction declined by 18%, signaling reduced downside concern even as leaders remain vigilant in monitoring market conditions.
Overall manufacturing CEO confidence levels remain largely stable about their ability to continue and navigate the uncertainty in the manufacturing sector, with only modest shifts in the last year: the slightest uptick in neutral positioning and a continued decline in those reporting low confidence. The data suggests measured optimism supported by disciplined oversight.
Key insights:
- Expansion sentiment is rebounding toward early 2025 levels (64% and 63% respectively)
- Contraction concerns have meaningfully eased from their highest point in May 2025.
- CEO confidence is stable at 86% of respondents being very or somewhat confident, with fewer expressing uncertainty in their leadership stance, from 10% in May 2025 to 4% in January 2026.
Shifts in the Top Areas of Executive Interest
Note: Number in parenthesis reflects the ranking from January 2025. Source: Manufacturers Alliance surveys, January 2025 and January 2026
While the top three executive priorities have remained consistent throughout 2025—economic conditions, tariffs, and pricing pressures—the secondary focus areas have shifted more noticeably.
Concerns specific to China experienced the sharpest decline in ranking, falling from fourth place a year ago to eleventh. This reprioritization suggests that while geopolitical considerations remain relevant, broader macroeconomic and pricing dynamics continue to dominate executive attention.
Key insights:
- Economic conditions, tariffs, and pricing remain the top strategic concerns.
- China-specific issues have declined significantly in perceived urgency.
- Secondary risk factors are becoming more fluid as conditions evolve.
Technology, Talent, and Tradeoffs
Capital Investments for 2026 Show a Shift in Priorities
Source: Manufacturers Alliance surveys, May 2025 and January 2026
Capital allocation patterns reflect continued emphasis on long-term competitiveness. Investment in technology and automation remains strong, extending a trend observed throughout 2025 and consistent with anecdotal feedback across manufacturing functions.
Although workforce training and development spending declined compared to May 2025, funding has increased 24% since September 2025—potentially reflecting renewed emphasis on reskilling initiatives to complement technology deployment.
Conversely, supply chain optimization investments have steadily decreased, falling 25% since May 2025, suggesting that many organizations may have moved beyond immediate post-disruption adjustments toward structural normalization.
Key insights:
- Technology and automation remain top investment priorities.
- Reskilling efforts are rebounding to support digital transformation, while still down from last spring.
- Supply chain optimization is receiving comparatively less incremental funding.
External Pressures and Internal Response
Manufacturing CEOs Continue to Relocate Sourcing
Source: Manufacturers Alliance surveys, January 2025 and January 2026
Primary Drivers for Relocating Sourcing
Source: Manufacturers Alliance surveys, January 2026
More than half of surveyed manufacturers continue relocating sourcing strategies into 2026. Tariffs remain a central influence on corporate strategy, particularly in long-term planning frameworks.
Interestingly, the intensity of concern around risk reduction has moderated, declining from 90% in 2025 to 67% in 2026. The most dramatic shift is in government incentives and disincentives, where concern dropped from 70% to just 11% year-over-year—indicating either greater clarity or reduced reliance on policy-driven advantages.
Key insights:
- Sourcing relocation remains active and strategic, but one-third of respondents are no longer considering relocation.
- Tariffs continue shaping long-term planning decisions.
- Concern over government incentives has declined sharply.
Primary Sources for Raw Materials and Components
Source: Manufacturers Alliance surveys, January 2026
The U.S. now overwhelmingly dominates sourcing strategies for raw materials and components. In September 2025, only 50% of respondents considered the U.S. as a relocation target. By early 2026, that figure has increased substantially, signaling a decisive shift in sourcing preference during the latter half of 2025.
At the same time, sourcing from China has also increased. While only 13% were considering China as a sourcing option in September 2025, 64% of organizations now report utilizing China as a source. This dual movement suggests a more nuanced strategy—balancing domestic reshoring with selective global engagement.
Key insights:
- The U.S. has become the dominant sourcing destination compared to 2025 where there was less of a percentage gap between sources.
- China sourcing has rebounded significantly.
- Manufacturers are pursuing diversified, multi-region sourcing strategies rather than singular shifts.
Note: The results of the January 2026 survey were compared with January 2025 results and May 2025 results.
