MILWAUKEE, April 9, 2025 -- Wipfli, a top 25 advisory and accounting firm, has released the findings of its manufacturing pulse study, capturing insights from nearly 300 manufacturing leaders across the U.S., Canada and Mexico. The study, conducted in March 2025, indicates that despite uncertainty in early 2025, manufacturers are optimistic, with 55% of respondents forecasting higher profits in 2025 compared to 2024. On average, manufacturers expect 2.7% revenue growth in 2025.
Manufacturers' sentiment up slightly
The HIQ Index, which measures expectations around profit levels, utilization, revenue and backlog, showed a modest increase in Q1 2025, rising to 57 compared to 52 at the end of 2024. Key drivers of sentiment remain consistent with previous years, including the rising cost of doing business, upward wage pressure, difficulty securing skilled labor and heightened competition from low-cost countries (LCCs).
"Most manufacturers are starting the year slow, but sentiment is generally trending up and we expect business to gain momentum across the board in the latter half of 2025 and into 2026. Certain industries, such as aerospace, defense and industrial equipment, are better positioned for growth compared to agriculture and automotive," said Laurie Harbour, partner at Wipfli. "Manufacturers need to double down on real data to develop more realistic forecasts for the year. To navigate ongoing challenges and uncertainties while pursuing emerging opportunities, companies have to rely on more accurate forecasts while continuing to operate in a disciplined manner with an emphasis on driving efficiencies."
Tariffs are a growing concern
A key focus of this study was the growing concern around tariffs and trade and policy, particularly considering the tariffs proposed and/or activated by the current U.S. administration. Sixty-one percent of respondents anticipated tariffs would impact their business.
According to respondents, these tariffs are already shaping global supply chain decisions, including paused contracts, shifts in supplier sourcing outside the U.S. and increased interest in establishing domestic manufacturing operations.
"Regardless of the type of manufacturing process, our data shows the industry expects an impact due to tariffs — both positive and negative," said Cara Walton, director at Wipfli. "As the manufacturing landscape rapidly evolves, leaders must stay informed on global trade policy, tariffs and workforce dynamics. Flexibility and informed decision-making will be key to navigating an increasingly complex environment in 2025."
Utilization rates decline year over year
Manufacturing utilization, measured using a 24-hour, five-day shift structure, has decreased compared to the previous year. While the Q1 2024 study showed utilization rates between 70% and 75%, Q1 2025 study findings show a drop to a range of between 51% and 73%. However, all manufacturing process types expect utilization to increase by the end of the year.
Skilled labor shortages persist amid hiring stability
Despite persistent difficulty in finding skilled labor, the industry is not seeing widespread layoffs. Forty percent of manufacturers report no change in headcount, while 21% are hiring for growth and just 4% are conducting layoffs. Many manufacturers are instead focusing on upskilling their current workforce, investing in automation and improving operational efficiency as alternatives to filling open positions.
About Wipfli LLP Wipfli is an advisory firm that delivers holistic solutions to help clients navigate the modern marketplace, optimize performance and drive growth. Our more than 3,300 associates deliver digital, people, strategy, risk, financial and outsourcing solutions to 55,900+ clients.
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