Manufacturers should use digital tools to make work more intuitive, productive and engaging.
Key takeaways
Tariffs are creating demand uncertainty, higher costs and margin pressures for businesses.
Aerospace suppliers need to assess how a dip in M&A activity will affect them.
Manufacturing trend #1: Adapting for the future: Workforce transformation strategies for manufacturers
The convergence of retiring baby boomers, a shrinking pool of skilled workers, rising wages, and pressures from immigration and trade policies is creating a perfect storm for manufacturers looking to optimize their workforce. To remain competitive, manufacturers need to prioritize workforce transformation strategies that embrace digital tools and other innovative approaches in order to attract and retain talent, adapt to changing workforce dynamics, and protect profits.
Manufacturing trend #2: What would it take to reshore U.S. manufacturing?
A central goal of the current U.S. administration is to bring back and expand domestic manufacturing and rebalance global trade to reduce the country’s trade deficits with key partners. Since January, the administration has pursued this agenda by introducing sweeping tariff measures, including broad-based 10%−25% tariffs on imports from Canada and Mexico that do not fall under the United States-Mexico-Canada Agreement; sector-specific tariffs on steel, aluminum and autos; 10% reciprocal tariffs on most countries; and a 145% tariff (reduced to 30% in May) on Chinese goods, alongside the elimination of the de minimis exemption for low-value imports from China.
These measures raised the average tariff rate on imported goods from 2.5% in 2024 to over 20% as of the end of April 2025. A 90-day pause on higher reciprocal tariffs and a temporary exemption on certain goods aim to give room for negotiation, but it is evident that an environment of significantly higher tariffs is intended as a long-term policy.
Manufacturing trend #3: Aerospace sector M&A: Impacts on the supply chain
Interest rates and the cost of capital are suppressing deal flow across the spectrum. In the absence of lower rates, which do not appear on the horizon given RSM’s economic forecast of one additional rate cut in 2025, this isn’t likely to improve.
Mergers and acquisitions have been reshaping the aerospace sector since 2021. These activities are influenced by supply chain challenges, regulatory pressures and market positioning. With the M&A outlook in this space starting to decline, aerospace suppliers need to assess how that dip will affect them.
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