LEK Consulting found U.S. manufacturers entered 2026 focused first on material costs and inflation, with profit growth and revenue growth ranking behind those defensive priorities.
More than 50% of respondents reported only moderate to low confidence in navigating the next six months as tariff threats, supply-chain disruption, the Iran conflict and softer consumer sentiment cloud planning.
Execution is concentrating on financially driven goals while longer-term initiatives such as automation, digitization and electrification have slipped in priority; interest rates and manufacturing backlogs moved up the agenda.
Confidence improves over time: manufacturers' belief in meeting business objectives rises about 20 percentage points from the next six months to the next three-plus years.
AI remains a notable exception to the pullback in transformation spending, with most respondents deploying generative or agentic tools and nearly 90% reporting positive returns.
While manufacturers pause physical automation to protect margins, could this seemingly safe wait-and-see strategy secretly destroy their long-term global competitiveness?
As industrial leaders stockpile materials against disruption, how will unprecedented power grid constraints quietly dictate the next major manufacturing boom?
With most factories seeing positive AI returns, what hidden legacy bottlenecks are truly preventing the rise of fully autonomous supply chains?