2025 in Manufacturing: A Year Defined by Numbers, Policy, and Technology

2025 was a year heavy with data, shifting strategies, broken expectations, and new bets on the future of U.S. manufacturing. Looking back through the numbers helps make sense of how tariffs, investment flows, mergers and acquisitions, the workforce, federal policy, automation, and AI shaped the industrial landscape. Here’s a clearer picture of what happened and why it matters going into 2026.

Tariffs: Big Numbers, Big Impact

Tariffs weren’t just headlines in 2025; they hit manufacturers’ bottom lines. New tariff policies introduced over the year could bring in $2.1 trillion in federal revenue over the next decade, according to the Tax Foundation, making them the biggest tax increase as a share of GDP since the early 1990s.

For many companies, that translated into tougher pricing decisions. According to an Institute for Supply Management (ISM) survey, 32% of manufacturers planned to pass all tariff-related cost increases on to customers, while another 54% said they would pass on some of the increases through higher prices or margin cuts. Only 8% said they would absorb those costs themselves.

The consequences were real on the ground: hiring decisions shifted, demand softened, and broader economic indicators showed slower job growth overall. Tariff uncertainty even reduced monthly job growth by up to 19,000 and nudged the unemployment rate higher in the latter part of the year, according to a Federal Reserve study.

Onshoring and Reshoring: Intent Outpaces Action

Reshoring, moving production back to the U.S., sounded like a logical response to tariffs, but the numbers showed mixed commitment. In a 2025 survey, 18% of manufacturers were actively looking to shift production to the U.S. within six months, and an additional 18% said they were considering domestic shifts that would take longer. Meanwhile, 31% said they weren’t planning to reshore, but were exploring alternative partners in tariff-friendly regions.

The Reshoring Initiative also reported that manufacturers cited three primary reasons for reshoring, including closer proximity to engineering and lower freight and duty costs. But while many expressed satisfaction with reshoring outcomes, the broader Kearney Reshoring Index fell in 2025, suggesting that global sourcing still favored low-cost international production for many companies.

M&A and Investments: Slow Start, Strategic Moves

Deal activity slowed compared with 2024, but not evenly. KPMG data showed a roughly 11.4% year-over-year decline in industrial M&A volume from Q2 2024 to Q2 2025. Despite that, some big strategic acquisitions stood out like Kimberly-Clark’s roughly $48.7 billion purchase of Kenvue.

On the investment front, global tech and capacity plays drew attention. Taiwan Semiconductor Manufacturing Co. (TSMC) is committed to investing about $100 billion in the United States over the coming years, a number echoed in policy discussions about strengthening domestic semiconductors. Smaller tech giants like Apple also pledged domestic investments tied to production and innovation.

Workforce: Fewer Workers, Steady Shifts

Employment in manufacturing ticked down. As of November 2025, the Bureau of Labor Statistics estimated about 12.69 million people working in U.S. manufacturing, roughly 76,000 fewer than a year earlier. That decline fit broader labor market trends: manufacturing has shed jobs compared with prior decades, and even with policy and training efforts, it remained below its peak workforce numbers.

Job transitions and separations also stood out: in October alone, there were 329,000 manufacturing job separations, and BLS counted 507,000 manufacturing workers unemployed as of November — representing a 3.3% unemployment rate that was lower than the national average but still significant.

Women made up a notable slice of the manufacturing workforce, with 3.6 million women employed in the sector as of November 2025.

Automation and AI: Investing in the Future

The role of technology remained central. A Deloitte survey showed that 80% of manufacturing executives planned to spend at least 20% of their improvement budgets on smart manufacturing technologies, including automation, data analytics, cloud computing, and sensors.

Robotics adoption continued worldwide: in 2024, about 542,000 industrial robots were installed globally, more than double the number from a decade earlier. The U.S. portion of those installations, however, lagged with around 34,200 units in 2024, down about 9% from the prior year, reflecting challenges in automation deployment compared with other countries.

AI use within manufacturing has also moved beyond experimentation. In an ISM survey, 29% of manufacturers said they were piloting AI applications in supply chain and operations, with another 20% naming specific applications already in use.

Federal Policy: Regulation and Recalibration

Federal policy in 2025 both propelled and constrained manufacturing. The Trump administration and Congress took 43 actions to modify or roll back various EPA regulations, reshaping the compliance environment for industries from chemicals to energy. Cost savings from revised reporting requirements under the Toxic Substances Control Act could reach $786 million, although many regulatory adjustments remained under debate.

Not all policy shifts were purely regulatory: infrastructure funding and incentive programs continued to influence where companies invested and how they planned future facilities, even as some projects were abandoned due to changing incentives, with $4.4 billion in project investments dropped through October since the Inflation Reduction Act was enacted, leading to 8,698 lost jobs.

Putting It All Together: A Mixed Year

When you stack the numbers side by side, a few clear themes emerge from 2025:

• Tariffs were large in scale but uneven in benefit, adding costs and pricing pressures even as they generated expected revenues.
• Reshoring intentions outpaced actual moves, reflecting practical barriers to relocating production.
• Strategic M&A and massive investment pledges continued, even as deal volumes softened.
• Workforce trends confirmed ongoing structural shifts, not sudden reversals.
• AI and automation remained core to future competitiveness, despite slower robotics growth in the U.S.
• Federal policy had real impacts, both in regulation and in how companies planned capital.

Most importantly, the year was less about sweeping transformation and more about preparing for it. Manufacturers grappled with complexity, juggling costs, talent, technology, and policy, and set the stage for what many expect will be a more stable and strategically driven 2026.