A capital spending spike, while positive, is adding demand pressure to the industrial ecosystem.
Key takeaways
Even with rising AI investment, execution remains a major issue in the manufacturing industry.
Fundamentals suggest the transportation and logistics sector is moving into a recovery.
What is the manufacturing outlook?
RSM’s manufacturing outlook provides insights into the major trends shaping the U.S. manufacturing sector throughout the year. In our latest edition, we examine the data center boom and its impact on the broader industrial ecosystem. Analysts also write about what artificial intelligence investment looks like in the manufacturing industry, and how transportation and logistics companies can prepare for the next business cycle. This industry outlook highlights actionable strategies and solutions to help industrial businesses navigate these challenges and remain competitive.
Manufacturing trend 1: How the data center boom is reshaping the industrial ecosystem
Major hyperscaler cloud service providers have announced an eye-watering level of capital expenditures in recent years amid the data center boom. Such investment, while positive, is adding demand pressure to the industrial ecosystem. More than generating demand, delivering against it in a constrained environment will be one of the biggest challenges for industrial companies. Businesses will need to plan carefully for sustained demand—expected to last at least into 2028—and invest in capacity, workforce and supplier relationships that can support multiyear lead times.
Manufacturing trend 2: AI investment for manufacturers: From experimentation to capital expenditure
Whether operating in the United States or in Europe, manufacturers increasingly see investment in artificial intelligence as a core driver of future productivity, profitability and competitiveness rather than a discretionary innovation spend. While adoption remains uneven, the shift is clear: AI is moving from small-scale pilots to routine capital expenditure embedded within wider digital and operational strategies.
Manufacturing trend 3: From survival to strategy: The playbook for transportation’s next business cycle
After several years defined by excess capacity, depressed freight rates and elevated capital costs, the transportation and logistics sector is reaching an inflection point, driven by both structural and demand-side change. Recent developments suggest a more stable foundation is forming: Capacity has exited the market, freight rates have moved higher, and broader indicators point toward improvement in underlying demand.
Related insights
2025 Economic and policy updates
Will a new administration work in your favor or bring new challenges?
Our team offers insights to help you navigate the months ahead.
Subscribe to Manufacturing Insights
Sign up to receive our monthly tax, accounting and operational information, ranging from tips for addressing daily challenges to strategic and long-term planning initiatives.
