Staffing Trends
The State of the Manufacturing Industry 2025
Manufacturing makes up more than 10% of the United States economy, contributing roughly $2.3 trillion yearly to the GDP. However, the industry also faces unique challenges in 2025. The rapid acceleration of technological advancements leaves the future of manufacturing uncertain. Plus, manufacturers have also had difficulty maintaining a stable workforce since 2020. Despite these challenges, there remain opportunities for growth and innovation for manufacturing in the United States.
In this article, we’ll take a closer look at the state of the manufacturing industry in the United States, from labor shortage solutions to how new tech is set to change day-to-day manufacturing operations.
Challenges in the Manufacturing Industry
The challenges for manufacturing industry businesses today are familiar. Unstable supply chains and labor shortages are far from new issues. However, the changing landscape of the global economy has significantly impacted how they play out and the strategies needed to combat them.
Labor Shortages
The manufacturing industry is no longer in the mass employment crisis of the 2020 COVID-19 pandemic. However, employers are still experiencing the ramifications of the “Great Resignation.” Following the nationwide lockdowns, many of those who left full-time jobs never returned, changed career paths, or shifted to hybrid and remote work permanently.
Today, manufacturers still struggle with high turnover rates and difficulties maintaining a full staff. Advances in manufacturing technology have also raised the demand for skilled laborers with expertise in operating new technology. At the same time, waves of retirement-age workers with high-level skills and experience are leaving the workforce.
Supply Chain Disruptions
While international materials suppliers have mostly recovered from pandemic-era shortages, the future of the U.S.’s global trade relations is uncertain. Tariffs may increase the cost of raw materials and components that U.S. manufacturers supply from foreign companies. Other geopolitical issues, like the attacks on cargo ships in the Red Sea, also lead to delays and price hikes in shipping.
Technological Arms Race
Advances in manufacturing technology have allowed small to medium-sized manufacturers to increase production. However, they have also made the industry more competitive, as the companies that integrate machine learning and robotics into their operations the fastest tend to be the most competitive.
2025 Trends In the Manufacturing Industry
Beyond rising challenges for manufacturers, emerging trends show the potential for new investment opportunities and ways to adapt to the new landscape.
Advancements in Robotics and AI
Artificial intelligence and automation are becoming more and more standard elements of manufacturing facilities. Not only do robots handle repetitive tasks, but experts predict AI will play a vital role in maintenance, data management, and product design. Here are some of the ways generative AI will change the manufacturing industry:
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Maintenance: Manufacturers have already begun using AI tools to assess and predict their maintenance needs. This allows companies to better plan facility shutdowns and schedule maintenance without sacrificing productivity.
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Analytics: One of the things AI is best at is aggregating data, and manufacturers investing in AI tools plan in large part to use it to find opportunities to increase efficiency and profit margins.
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Design innovations: While AI is far from replacing engineers, it has the potential to revolutionize the design process for new products. Manufacturers can use AI tools to evaluate existing products and suggest changes.
Hybrid Staffing
The increase in the use of technology also affords opportunities for remote and hybrid workers. Tools like drones, automated systems, and AI will still require human moderation. Additionally, companies are more likely to shift to flex workers to fill gaps in staffing.
Reshoring
The unclear future of U.S. trade relations is driving many manufacturing companies to invest in domestic production. This change reduces the risk of logistic issues and supply disruptions. However, it will also require a renewed mobilization of domestic workers, which could prove challenging in the current labor market.
Increased Domestic Battery Manufacturing
One of the biggest reasons the U.S. depends on foreign manufacturers is the need for batteries. With the American government’s push to reduce the country’s reliance on foreign suppliers, many U.S. manufacturers are investing in ways to produce these specialized components themselves. This emerging industry presents a wealth of opportunity for manufacturers as long as they can keep up with staffing requirements.
How Companies In the Manufacturing Industry Can Overcome Staffing Challenges
Despite new opportunities, companies in the manufacturing industry still have to find ways to overcome the national labor shortage. As the U.S. finds its footing in the changing global economy, here are some actionable steps manufacturers can take to address staffing issues:
Determine Your Staffing Needs
One of the most important ways to be proactive about maintaining a full staff is to clearly understand your staffing needs. This means taking regular stock of predicted demand and having a plan for if you suddenly find yourself short-staffed.
Find Flexible Solutions
Particularly for smaller operations with only full-time employees, losing even one or two workers for more than a few days can slow production and lead to missed deadlines. In these situations, it often isn’t feasible to onboard another employee quickly enough. Having access to flexible workers can help even out workflow and remedy temporary staff shortages.
Focus On Employee Retention
Anyone who has managed a team of employees knows how difficult (and costly) it is to replace a full-time employee. From posting a job listing to training a new hire, the entire onboarding process costs an average of $10,000-40,000. The hiring process can also take months from start to finish.
To avoid the cost and effort of replacing an employee, it’s essential to prevent a high turnover rate. This means focusing on retaining your most valuable and skilled employees and hiring the right candidate to begin with. Pay and benefits, as well as a positive work environment, are ways to incentivize employee loyalty.
Form a Partnership With a Staffing Agency
Managing a manufacturing business comes with enough challenges that adding recruiting to your responsibilities can be too much. In an industry where skilled labor is already at a premium, it’s essential to foster lasting connections with a reputable staffing partner.
What to Look for in a Staffing Partner
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Reliability: A staffing partner is no good to you if they don’t respond promptly to your staffing needs. Look for a company with a high rating and reputation for reliability.
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Versatility: Every manufacturing business is different. Your staffing partner should be able to staff any kind of worker you might need. You also need a staffing company that can scale to meet your labor needs as your business grows.
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Value-added services: One of the best parts of using a staffing service is that it can handle the payroll, insurance, and workers’ comp paperwork. You get your skilled workers fast, and the agency handles the rest.
Labor Finders: Staffing Solutions for a Changing Industry
While the state of the manufacturing industry is ever-evolving, one thing remains constant: manufacturers rely on skilled workers to keep their operations going and meet customer demand. Labor Finders International is a trusted partner for small and medium-sized manufacturers who rely on a consistent workforce. We specialize in supplying temporary, temp-to-hire, and permanent staff for manufacturers. Contact us today to find out more about the benefits of using Labor Finders as your staffing partner.