At Rea’s Manufacturing Day in Cleveland, our team invited economist Michael Weidokal of to share what lies ahead for the industry. His forecast sparked an important discussion among Ohio manufacturers and business leaders about how to prepare for the next economic cycle.
As we listened to the conversation unfold, one message was clear: the environment that fueled manufacturing growth over the past decade is changing fast. Understanding these shifts now will be critical to staying competitive in 2025 and beyond.
After a decade of strong growth, the next few years will test even the most resilient manufacturers. The themes that emerged from this year’s Manufacturing Day discussions point to one conclusion: those who adapt early will have the advantage.
Here are five economic forces every manufacturer should track in 2025-2026 and what to do about them.
These insights, drawn from economist Michael Weidokal’s analysis and from conversations with manufacturers during the event, highlight where leaders should focus their attention next.
Trade War Uncertainty Creates Planning Paralysis
Tariff rates have experienced significant volatility throughout 2025, creating what Michael Weidokal described as a “whipsaw effect” for manufacturers. Companies are being pulled in opposite directions by rapidly changing trade policies, making long-term planning extraordinarily difficult.
For manufacturers dependent on imported materials or components, this volatility makes budgeting and planning nearly impossible. The bigger concern is the ripple effect. When the U.S. imposes tariffs, trading partners retaliate, creating uncertainty not just for U.S.-based manufacturers but for global supply chains. Companies are delaying capital investments and supplier commitments until trade policy stabilizes.
Manufacturers should stress-test supply chains for multiple tariff scenarios, evaluate domestic sourcing alternatives and nearshoring options, and build contingency plans for rapid input cost changes. The companies that model different scenarios now will be positioned to pivot quickly when policies shift.
Global Growth Is Slowing
Global gross domestic product (GDP) growth is forecast to slow over the next several years, driven largely by trade tensions, demographic challenges, and geopolitical instability, according to economic forecasts presented at Manufacturing Day.
For manufacturers, slower global growth means fewer customers with expanding budgets. Export-dependent companies will feel this first, but even domestic-focused manufacturers will face pressure as competitors fight for market share in a slower-growth environment.
During presentations, several attendees noted that this shift is already visible in customer demand and pricing pressure. Our team continues to see manufacturers lean on operational efficiency and better forecasting tools to manage through slower order cycles.
Manufacturers should shift focus from riding GDP growth to capturing market share through productivity improvements and operational efficiency. In slower-growth markets, the strong get stronger by taking share from competitors.
The Workforce Demographic Cliff Is Here
Working-age populations are stagnating or declining in most developed economies. The U.S., Europe, and China all face the same challenge: fewer workers entering the workforce as Baby Boomers retire.
This is not a temporary labor shortage that will resolve when the economy slows. This is a structural demographic shift that will persist for decades. Manufacturers competing for skilled workers could face rising wage pressure and chronic unfilled positions.
Manufacturers should accelerate automation investments to reduce labor dependency, develop strategies to extend the productive years of experienced workers, and compete aggressively for talent with compensation, culture, and flexibility. The manufacturers who solve the labor equation will have a significant competitive advantage.
Political and Geopolitical Risk Is Rising
Political instability is increasing in many developed economies. The rise of extremist movements, political fragmentation, and declining confidence in democratic institutions create uncertainty for business investment.
Geopolitically, tensions between major powers remain high. Conflicts over trade, technology, resources, and territorial disputes threaten to disrupt global commerce. Manufacturers with international supply chains or customer bases face elevated risk.
Manufacturers should diversify supply chains to reduce single-country dependencies, monitor geopolitical flashpoints that could impact operations, and build contingency plans for supply disruptions. Geopolitical risk should be a factor in capital allocation decisions.
Sustainability Pressures Are Mounting
Climate change is driving more frequent and severe natural disasters, raising costs for manufacturers in vulnerable regions. Simultaneously, customers and regulators are demanding more sustainable practices and transparency.
The energy transition from fossil fuels to renewables is accelerating. Manufacturers who depend on abundant, cheap energy may face rising costs in coming years, while those who invest in renewable energy and sustainable operations may gain competitive advantages.
Manufacturers should audit energy usage and costs, evaluate renewable energy options for facilities, understand carbon footprints, and prepare for customers and regulators to demand sustainability reporting. The manufacturers who lead on sustainability will be rewarded with customer loyalty and regulatory goodwill.
Before the event wrapped up, one takeaway stood out across all discussions: these headwinds are not temporary disruptions, but structural shifts that will define the next decade of manufacturing.
How Rea Helps Manufacturers Navigate Economic Uncertainty
The Rea Manufacturing Team partners with companies across the region to interpret economic data, build financial resilience, and identify growth opportunities even in volatile conditions.
We don’t just summarize what’s happening, we help you plan what to do next. Contact Rea’s Manufacturing Team to discuss how these economic forces may affect your operation and the practical steps you can take now to protect profitability.
