As all industries navigate a changing economic climate, manufacturers are re-strategizing and reassessing their appetite for risk. This shift in attitude is reflected in our latest CEO Outlook, where survey respondents identified general economic and global market volatility as their top concern.
Despite this, many are uncovering significant market positioning opportunities. Key investment priorities include technology and automation, supply chain optimization, and workforce training and development—critical areas that enable manufacturers to adapt and remain competitive in an increasingly volatile environment.
Top 6 Hot Topics for the May 2025 Business Survey
Source: Manufacturers Alliance CEO survey, May 2025.
Since the last CEO report in January 2025, a wave of announcements has underscored the shifts observed in these key focus areas. General economic and global market volatility returned to the top spot, swapping places with expected changes in tariffs, which had led the list in January.
Notably, cyber threats dropped to sixth, while commodity and raw material prices climbed to third. Although manufacturing remains the most-targeted industry by cybercriminals with the average cost of a breach reaching $5.56 million, these threats are currently being overshadowed by persistent concerns around trade and supply chain stability.
6 Concerns & How They Trended from October 2023 – May 2025
Source: Manufacturers Alliance CEO surveys, 2023 - 2025.
Nearly three-quarters of manufacturing CEOs have confidence that their company is well-positioned to navigate the uncertainty across the sector. Considering, 74% are maintaining a balanced approach by addressing both short-term challenges and long-term priorities. All survey respondents have noted the impact of geopolitical risk on their operations.
Manufacturers Focusing on Both Short-Term and Long-Term Priorities
Majority of Manufacturing CEOs Express Confidence in their Company Despite Market Uncertainty
Source: Manufacturers Alliance CEO survey, May 2025.
To adapt, many are trying to find a balancing act. According to Navigating Uncertainty, strategic development planning has borne the brunt, with a greater focus on less capital-intensive solutions and more interest in using technology to counteract challenges like talent and labor.
Finding Alternatives, From New Strategies to New Sourcing
Nearly Half of Companies Expect Business Expansion in 2025
Source: Manufacturers Alliance CEO survey, May 2025.
Just under half of manufacturing CEOs expect expansion—a decrease of 18% from January 2025. Meanwhile, expectations of contraction continue to rise, increasing by 20% since Q4 2024 to reach 29% in May 2025.
In response, many manufacturers are exploring alternative sourcing and investment strategies to reduce risk and remain competitive. Risk reduction was cited as the number one driver for these decisions. Government incentives and disincentives (including tariffs) followed closely, influencing more than half of respondents. Notably, customer demand as a driver for sourcing relocation saw significant growth, rising from 10% to 42% in the past quarter, making it the third most-cited motivator.
The growing demand for product customization is also driving competitive differentiation. Thanks to digitalization and social media, end users and customers can now feed insights directly into product development cycles. In increasingly localized markets, this allows products to be better tailored to regional preferences.
Primary Motivations for Sourcing Relocation
- Reduced risk
- Government incentives/disincentives
- Customer demands
As of May 2025, 32% of organizations are relocating only specific functions or products, not completing full relocation. The percentage of organizations concentrating on relocating to Mexico has dropped, along with the United States when compared to January 2025 plans.
An Ongoing Investment Shift
Technology and automation are expected to see the most amount of capital investment growth over the next 12 months, as 68% of manufacturers predict increases. With unique situations aside, research found that this is often the result of needing to access information faster to run prediction and analysis with market volatility, as well as stemming from labor challenges. As organizations shift production locations, they’re exposed to a plethora of talent challenges (i.e. cost, market availability, skills) that can be circumvented or at least assisted through technological advancements.
Expected Investment Shifts in the Next 12 Months
Source: Manufacturers Alliance CEO survey, May 2025.
Sustainability initiatives, which had limited but some investment increases in January 2025, are no longer seeing any additional funding. This has continually dropped since Q4 2024.
Looking for More?
Continue to build out perspective by exploring the latest industry trends in Navigating Uncertainty: The geopolitical impact on manufacturing trends in 2025.
