
Manufacturing
Market Trends
Talent Challenges
Despite loosening labor markets, manufacturers should continue to focus on a long-term talent strategy, including leveraging technology, to address the ongoing applicant gap and skills gap and improve retention.
AI and Generative AI
To improve operational efficiency, manufacturers can continue to invest in strengthening their data foundation and targeted, high-ROI use cases for AI and generative AI.
Supply Chain
With supply chains likely to face ongoing elevated costs and disruptions throughout the remainder of 2025, manufacturers can leverage technology solutions such as AI and supply chain planning tools to improve efficiency while maintaining resilience.
Smart Operations
Manufacturers are likely to continue to invest in their digital foundation for smart operations and target high-ROI use cases for advanced technologies to address elevated costs, the ongoing skills gap, and the need for efficiency gains across the organization.
Clean Technology Manufacturing
Investment in the development and production of clean technology products is likely to continue throughout 2025, with manufacturers prioritizing targeted high-ROI products that will help customers meet their company-set emissions goals.
*Source: Deloitte – 2025 Manufacturing Industry Outlook
M&A Activity
Following a year of steady deal flow, M&A activity in the manufacturing sector has shown a declining trend, including a major decline in Q2 2025. Venture capital deals continue to be the primary driver of activity, closely followed by strategic buyers and financial sponsors. Median valuations have shown significant volatility since Q3 2023, with a 44.8% jump between Q2 2024 and Q4 2024. After reaching a record high of $48.64 million to close out 2024, valuations have remained relatively stable, underscoring sustained investor confidence in high-value opportunities within the sector.

