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Talent Talk: US Manufacturing Is Turning the CornerTalent Talk: US Manufacturing Is Turning the Corner

85% of US manufacturing executives expect production volumes to increase in 2025, according to a recent survey.

Paul Sturgeon

January 18, 2025

2 Min Read
signpost indicating turn ahead
Atlantide Phototravel/Corbis Documentary via Getty Images

In our previous Talent Talk we began making the case for why manufacturing will see a rebound in 2025, from what was a very difficult 2024. The first part of the formula is the massive US investment in manufacturing construction: We have tripled new factory builds over the past three to four years.

By itself, unfortunately, that is not enough. The factories could sit idle, and, in fact, low utilization rates have been one problem plaguing the plastics industry for some time. So, is optimism justified or is it just hope?

Finding hard evidence

As NFL coach Bill Parcels once said, “You are what your record says you are,” and we will continue to look for hard evidence of improvements. For example, we look closely at the Institute for Supply Management’s (ISM) Purchasing Managers Index (PMI). A reading above 50 indicates expansion in the manufacturing sector. December 2024 marked the 25th reading below 50 in the last 26 months.

However, the reading of 49.3 was the highest in the last nine months and has us knocking on the door of a recovery. Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said, “Manufacturing’s purchasing and supply executives expect to see overall growth in 2025.” Digging a little deeper into the PMI data revealed that Plastics & Rubber Products showed growth in December, an infrequent occurrence in the past couple of years.

Industry expectations set for growth

Until the hard data is in, the best gauge we have is the expectations of the industry. Eide Bailly, a CPA and business advisory firm, recently conducted a survey of US-based manufacturing companies with $50 million to $1 billion in annual revenue. 85% of respondents expect production volumes to increase in 2025, while 15% expect volumes to remain the same. Not a single respondent anticipates a production decrease.

That survey focused only on mid-market manufacturers, arguably the backbone of the industry, but the National Association of Manufacturers reports similar sentiment. Nearly 71% of respondents are positive about their company’s outlook, up eight percentage points from just the previous quarter.

Don’t forget to buckle up

There is every reason to believe we are poised for a cyclical upturn in manufacturing in the United States. Furthermore, history shows us that these cycles typically last at least two years. This could be a fun ride, but you should buckle up!

About the Author

Paul Sturgeon

Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].

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