Manufacturing Trends for 2026

Disruption is the norm in manufacturing and 2026 is going to be no different. Energy prices swing fast, supply chains face shocks, cyber attacks are routine (even if kept private) and AI is moving from novelty to necessity. 

The question for 2026 is not what will break next? It is can your operations keep moving when it does?  

Here we are sharing six predictions that will shape the sector in 2026 and what they mean for organizations in the sector. 

Energy management will become a direct lever to shrink (not just manage) costs 

Industrial energy prices in the UK are higher than the global average and materially higher than the US. The winners of 2026 will not just be those with the best energy procurement deals but the ones treating energy as a real-time operational variable.  

What changes in 2026 is speed. Prices move quickly, and the margin impact lands immediately. Cost-competitive manufacturers will move to active energy management strategies: 

1. Track consumption at the machine level and in near or real time 
2. Shift production windows to cheaper energy periods when operationally possible 
3. Use data forecasting and AI to anticipate and manage price spikes and falls and adjust plans before cost impacts 

When competitors (both domestic and international) can operate at lower energy costs, pricing power erodes quickly. If the energy gap continues to widen, manufacturing geography shifts more aggressively and while sources of energy has always been a factor, it may soon be a determining factor to location strategy. 

Reshoring evolves from a strategic option to an operational necessity  

In 2023, US manufacturers announced 287,000 reshoring and foreign direct investment jobs, the second-highest year on record. Since 2010, nearly two million jobs have returned which equates to nearly 40% of those lost to offshoring. One of the most telling indicators is that 69% of US manufacturers have begun reshoring supply chains back to the US, and 94% of them say it is working.   

The reasons are largely practical. Around 45% want manufacturing closer to engineering capability. 45% want to reduce freight and duty costs, and 38% were actively trying to reduce geopolitical risk. Nearly half of US businesses plan to increase nearshoring in 2026. Research from the Reshoring Initiative and related industry surveys shows that regional and nearshore sourcing is expected to continue rising sharply over the next few years as firms rebalance cost against risk. 

In some cases, the cost of labor and raw materials may remain higher closer to home, but the risk adjusted cost, factoring considerations like tariffs, energy price volatility, transport risk, and currency fluctuations making the direct production costs less of a driving factor. 

A FTSE250 manufacturer will fall from a cyber attack  

Manufacturing is quickly becoming the prime target for cyberattacks, and the exposure is growing as plants become more connected. According to IBM’s 2024 X-Force Threat Intelligence Report, manufacturing accounts for more than 25% of incidents. Attackers know downtime is costly and that operational pressure increases the likelihood of paying quickly, restoring quickly, or making rushed decisions. 

The Jaguar Land Rover attack in 2025 showed exactly what happens when a manufacturer gets hit hard. JLR reported a £485 million loss in Q3 2025 (after a £398 million profit the prior year), plus an additional £196 million in direct cyber response costs, with production shut down for around six weeks across all global facilities.  

The key shift manufacturers face in 2026 is how they define cybersecurity. It is no longer just about defense, it is operational resilience: 

• How quickly can you isolate an incident? 

• How fast can you restore critical systems and backups 

• Can a plant run safely in a degraded mode?  

• Do you have a disaster recovery plan for shipping, invoicing and scheduling that doesn’t depend on core systems and your ERP? 

In 2026, a prolonged outage, supplier chaos, or regulatory escalations could overwhelm capacity. We expect to see more attacks on major companies who will possibly fall themselves. But certainly the dependent businesses in their supply chain, who do not have the cash buffer, insurance coverage, operational contingency, or recovery discipline to weather the storm, will fall. 

AI moves from pilot to production 

2025 was the year of the AI pilot, the proof of concept, the published report that kept shareholders happy. In 2026, AI moves out of innovation labs and onto the factory floors. Predictive maintenance for machines, augmented reality to improve efficiency and training, automated and more accurate quality control – all of this is becoming commonplace.  

But the barrier to adoption is not the technology itself but the company’s operating model and the people who use it. Typically, initiatives fail not because the technology is bad but because the data wasn’t correct, the outputs weren’t configured correctly, and the behavior of leadership didn’t change. 

To get ahead of the AI curve, leaders in 2026 will:  

• Build data lakes of quality that integrate critical systems  

• Structure the operating model to be digital by default 

• Make AI usable by people on the shop floor (not buried in a dashboard) 

• Embark on training for themselves, technically and culturally 

AI will end up optimizing everything, if manufacturers let it  

AI will increasingly shift manufacturing from reacting to problems to preventing them. Instead of fixing breakdowns after they happen. AI will predict and prevent failures before they occur. Maintenance and reliability management will move from reactive firefighting to proactive control, reducing downtime and extending asset life.  

AI will change the way people work. Routine decisions like scheduling tasks and flagging risks, will happen at machine speed. Freeing technicians and engineers to focus on higher-value work such as problem solving, improvement project and innovation. New roles will emerge around managing, training and governing AI systems, utilizing highly skilled workers.  

Vertical integration accelerates to secure critical dependencies 

The logic behind vertical integration is strengthening: supply resilience, quality and traceability. In 2025, 73% of supply chain managers felt under pressure to expand capabilities and mitigate risks. Disruptions have pushed manufacturers to take control of operations previously – raw material sourcing, component manufacturing, even distribution – to reduce reliance on third-party vendors and protect continuity. 

Quality and traceability will also drive vertical integration; it becomes a way to control standards and protect brand trust. People care more deeply about where materials and produce comes from and opaque supply chains can warn off customers. Increase transparency whilst decreasing risk in your supply chain and sourcing teams and you’ll see an upturn in customer satisfaction. 

Conclusion  

These are not mutually exclusive trends; much like the manufacturing industry itself, everything is interlinked. Energy volatility accelerates reshoring decisions. Reshoring affects cyber exposure. AI improves uptime – but increases dependence on digital control. Vertical integration reduces supplier risk – but increases operational complexity. The tradeoffs and balances go on and on. 

The common foundation amongst them all is resilience; being able to actively manage and respond in the face of adversity and change is critical.  

A practical question for leaders: if your most critical site lost systems access tomorrow, could it run safely, recover quickly and continue to serve customers? Or would everything grind to a halt? That is 2026 in manufacturing.