MANUFACTURING INDUSTRY OUTLOOK 2026

The global manufacturing sector is entering a period of profound transformation. According to Deloitte’s 2026 Manufacturing Industry Outlook, U.S. manufacturers are simultaneously facing significant economic, workforce, and supply chain challenges,… while also encountering major opportunities driven by digital technologies, artificial intelligence (AI), and smart manufacturing.

Data from Deloitte’s 2026 Manufacturing Industry Outlook indicates that U.S. manufacturing is undergoing deep structural restructuring, where digital technology, AI, resilient supply chains, and ESG are no longer emerging trends, but have become the new operational standard.

For Vietnamese manufacturing enterprises, the key question is not “What is the U.S. doing?”, but rather how these changes will soon become mandatory requirements imposed by multinational corporations, global customers, and supply-chain partners.

This article synthesizes and analyzes Deloitte’s key insights, while supplementing them with additional real-world data to help manufacturers develop clearer short-term and long-term strategies.

I. Economic Context: From Expansion to Optimization and Cautious Investment

During the 2024-2025 period, the manufacturing sector experienced notable volatility:

• The U.S. Manufacturing Purchasing Managers’ Index (PMI) remained below the 50 threshold for extended periods, signaling a slowdown in manufacturing activity.

• Labor and raw material costs remained elevated, with input costs projected to rise by approximately 5.4% over the next 12 months, placing continued pressure on profit margins.

• Manufacturing construction spending in the U.S. – investment in new and expanded production facilities – declined from nearly USD 240 billion in mid-2024 to approximately USD 220 billion by August 2025 (YCharts data). This trend confirms that capital investment is no longer growing steadily as it did during the post-COVID recovery, reflecting a more cautious approach to capital expenditure amid uncertain demand.

Key Insight

Manufacturing is transitioning from a phase of “demand-driven expansion“ to one of “optimization for resilience and readiness to rebound“ Manufacturers are increasingly challenged by:

(1) Weakening and volatile demand, making production planning less predictable

(2) Margin compression caused by limited pricing power and rising costs

(3) A strategic dilemma: under-investing risks falling behind in productivity and technology, while over-investing increases the risk of excess capacity and financial strain

In 2026, the winners will not be the companies that build factories the fastest, but those that upgrade their management systems and decision-making capabilities the earliest.

II. AI and Smart Manufacturing: The New Foundation of Competitive Advantage

Technology is rapidly becoming a survival factor in modern manufacturing:

• More than 55% of companies have already implemented AI or GenAI, indicating that the market has moved beyond experimentation into real operational deployment – across planning, production, quality management, and supply chain functions (Deloitte’s 2024 Future of the Digital Customer Experience).

• Approximately 40% of manufacturers plan to increase investment in AI, machine learning, and advanced analytics over the next three years, signaling an accelerated wave of digital transformation and a widening gap between early adopters and laggards.

• When 92% of executives identify smart manufacturing as a key competitive differentiator, it confirms that advantage no longer comes from factory scale or low labor costs, but from intelligent operations powered by real-time data, automation, and AI.

Key Insight

Competition in manufacturing is shifting from “who can produce more“ to “who can operate smarter“ Companies that establish integrated ERP–MES–Data–AI platforms early will be better positioned to optimize costs, improve forecast accuracy, and make faster, data-driven decisions-preserving margins and building sustainable competitive advantage beyond 2026.

III. Manufacturing Workforce: The Skills Gap in the Digital Era

Despite a cooling labor market, the shortage of skilled manufacturing talent remains a major challenge in the U.S.:

• Nearly 60% of manufacturers struggle to recruit and retain skilled technicians, engineers, and experienced operators.

• The U.S. manufacturing sector may require up to 3.8 million new workers between 2024 and 2033, yet many positions risk remaining unfilled due to a shortage of digital and technology skills—highlighting a growing misalignment between technology investment and workforce readiness.

• Approximately 47% of existing jobs could disappear over the next decade due to technological transformation, while demand rises sharply for skills in robotics programming, data analytics, and human-automation collaboration.

• Although many companies are implementing smart manufacturing initiatives, only 48% have standardized training programs, and 35% cite workforce readiness for the “Factory of the Future” as a top concern-indicating insufficient digital upskilling of current employees.

Key Insight

In the era of smart manufacturing, competitive advantage does not come solely from investing in ERP, MES, AI, or automation-but from building a digitally capable workforce that can operate, optimize, and continuously improve these systems. Companies that transform technology without transforming people risk having “advanced systems with no true system owners”.

IV. Supply Chains: Transparency as the Foundation of Resilience

Global supply chains have improved since the crisis period, but have not returned to pre-pandemic stability:

• Raw material lead times declined from a peak of approximately 100 days in July 2022 to around 87 days by August 2023, yet remain above pre-COVID levels-indicating persistent delays and uncertainty that undermine traditional planning models.

• 76% of manufacturers are deploying digital tools to increase supply-chain transparency, aiming to enhance end-to-end visibility and flexibility.

• 82% of supply-chain leaders plan to adopt AI within the next five years, while predictive analytics (87%), cloud computing (91%), sensors (88%), and robotics (83%) are also identified as key technologies to drive supply-chain performance (MHI Annual Industry Report 2025, in collaboration with Deloitte).

Key Insight

As supply chains remain structurally unstable, manufacturers must build digital, transparent, and adaptive supply chains. AI, analytics, and data platforms are no longer support tools-they are the central nervous system that enables forecasting, rapid decision-making, and effective responses to global disruptions.

V. ESG and Sustainability: From Strategic Commitment to Data-Driven Execution

Sustainability consistently ranks among the top three strategic priorities for business leaders, with technology and AI playing a critical role in translating ESG commitments into measurable outcomes (Deloitte Global 2025 C-Suite Sustainability Report).

• 83% of global executives have increased investment in technology to monitor sustainability metrics, mitigate risk, and support business model transformation, signaling that ESG is no longer treated as a “paper exercise” (Deloitte Global Technology for Sustainability survey).

• While 74% of companies report Scope 1 emissions, only 15% fully report Scope 3 emissions, despite Scope 3 typically representing the largest share of total emissions-underscoring the urgent need for data, systems, and digital capabilities to enable real ESG execution.

Key Insight

Sustainability has shifted from strategic intent to execution capability, where technology and data become core competencies. As ESG remains a top executive priority and technology investment accelerates, competitive advantage will belong to companies that not only set emissions targets, but also build digital systems to measure, manage, and optimize the entire value chain-especially complex areas such as Scope 3 emissions.

What Should Manufacturing Enterprises Prepare For?

1. Upgrade Digital Management Capabilities-Not Just Buy Software

ERP, MES, data platforms, and AI must function as the company’s central nervous system, enabling:

• End-to-end integration across planning, production, quality, finance, and supply chain

• Real-time, data-driven decision-making instead of intuition-based management

2. Invest in AI and Smart Manufacturing with Clear ROI

Technology investments should focus on:

• Cost optimization and waste reduction

• More accurate demand, capacity, and inventory forecasting

• Faster response to market volatility

3. Build a Digital Workforce in Parallel with Technology

Digital transformation will fail without people:

• Reskill and upskill engineers, production managers, planners, and supply-chain teams

• Standardize processes and operational capabilities in a digital environment

4. Redesign Supply Chains for Transparency and Flexibility

• Deploy digital supply-chain platforms, analytics, and AI

• Improve risk forecasting, scenario simulation, and inventory optimization

• Reduce dependency on single suppliers or markets

5. Integrate ESG into Daily Operations-not Just Reporting

• Digitize energy, emissions, and material data

• Manage Scope 1, 2, and 3 emissions on a unified system

• Turn sustainability into a competitive advantage with multinational partners

6. Invest in “Smart CAPEX” Instead of Pure Expansion

In an uncertain growth environment:

• Prioritize improving efficiency of existing factories

• Optimize capacity, quality, and lead times

• Invest in digital platforms before investing in concrete and steel

Conclusion, the core message from Deloitte’s 2026 Manufacturing Industry Outlook is clear:

The manufacturers that will succeed in the coming years are not those that expand the fastest, but those that digitize the earliest, operate the smartest, and make the best data-driven decisions.

3S Software Co., Ltd.

To successfully upgrade a business, businesses need an experienced and trusted partner. 3S will be a partner accompanying businesses on their path of development, helping businesses become more comprehensive and increase productivity at lower costs. Along with compliance with the Epicor Signature Project Implementation Methodology, it will help businesses increase production efficiency and improve profits at a very reasonable cost. 3S believes that it will always bring the most satisfaction to customers.

5 key solutions of 3S include:

• Epicor ERP – Enterprise Resource Planning solution

• Epicor MES – Manufacturing Execution System solution

• BPM XSOL – Business Process Modeling solution

• ECM DOCSTAR – Enterprise Content Management software solution

• Epicor CADLINK – Solution enabling the transfer of CAD data (AutoCAD, Solidworks) to Epicor ERP

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