U.S. labor productivity soared at a 4.9% rate in the most recent quarter as compared to the typical annualized rate of 2% during the current business cycle. We are seeing productivity gains across the board as manufacturers utilize predictive processes such as SIOP and advanced technologies such as AI, robotics, and the automation of processes and better utilization of ERP.
Manufacturing has been in contraction for the last few years, while geopolitical risks are heightened and tariffs have created additional uncertainty, yet the future is starting to look bright. Investments and expansions are picking up. The most successful manufacturers will position for success by preparing for opportunities, mitigating risks and building resiliency and capabilities.
Global supply chains started a full transformation in 2025 spurred on with geopolitical risk and encouraged by tariffs, and the pace accelerates as the New Year kicks off with geopolitics dominating the conversation and fundamentals making a comeback. We review learnings from the prior year and priorities for success in 2026.
