Key takeaways
- Wipfli’s recent Q4 survey for 342 manufacturers points to a manufacturing industry reporting broad revenue growth across a range of sectors and process types.
- However, the high cost of doing business remains a major challenge for manufacturing leaders to overcome, with many manufacturers failing to pass through increased prices.
- Manufacturers should carefully assess their costing and quoting while making targeted investments to increase operational efficiency and protect eroding profit margins.
After a difficult couple of years, manufacturers should feel more optimistic as we head into 2027. Wipfli’s just-published Q4 manufacturing pulse survey report finds that businesses are reporting higher revenue and better quote activity, although significant challenges do remain.
Keep reading to learn key highlights from the report (the complete results are only shared with survey participants), which features original data from 342 manufacturing businesses across every major process type.
The manufacturing industry outlook for 2027 is getting stronger
Wipfli’s Q4 manufacturing pulse survey reveals an industry that is growing and poised for more. Most manufacturers expect their revenue to go up, and even more are confident that they will likely achieve their profit goals, although leaders at companies with below $40 million in revenue generally demonstrated less optimism than their peers.
- Sixty-six percent of manufacturers expect their revenue to grow year over year. Forty-six percent predict 5-10% growth and 20% expect 10% or higher.
- Ninety-four percent are at least somewhat confident of achieving their profit goals. However, only 25% are very confident about doing so.
- Seventy percent report hiring for growth or to fill open positions. Most businesses report new hiring to meet growing demand.
- Wipfli’s catch-all Manufacturing Index metric shows growth across a range of process types. This includes fasters, forging, gears and bearings, metal formers, plastics processors, suppliers and tooling — all of which showed stronger growth than they did at the beginning of 2026, with most also reporting higher utilization.
- Gains are distributed unevenly. Industries related to data centers — like energy, solar, HVAC and electronics — are thriving, as are aerospace and defense. However, automotive is flat, and appliances and other residential-focused goods are struggling more.
Overall, manufacturing business leaders are notably more excited than they were a year ago. Quote activity is turning into real quotes, revenue is climbing and 65% of leaders surveyed now describe themselves as optimistic.
High costs do continue to eat away at profitability
The survey is not all roses. High costs and profitability challenges remain a potent obstacle for many manufacturing businesses to overcome, especially as most of these costs are structural, driven by factors like tariffs and shortages that individual manufacturers can’t do anything about.
The cost of doing business is still too high
The high cost of doing business remains a major concern for manufacturers. Leaders cite growing labor costs, inflation and raw materials pricing as among their top challenges. Each of these factors contributes to margin erosion, which makes it harder for businesses to improve profitability even as revenue rises.
Tariffs continue to cause pain for many manufacturers
Tariffs are still a significant concern as well. 71% of manufacturers surveyed report being affected by Section 232 tariffs; within that group, 65% say those tariffs have had a meaningful negative impact on their businesses. Many manufacturers also describe Section 301 and reciprocal tariffs as challenges.
Most businesses are struggling to pass through price increases
While tariff rates have stabilized somewhat, manufacturers are still largely struggling to pass those and other cost increases through to customers. Only one in four manufacturers report being very successful at passing through prices, with most businesses eating at least some cost hikes themselves.
Crucially, this is happening not just because manufacturers are locked into contracts with customers, but because many businesses haven’t updated their costing and quoting to reflect today’s prices.
Manufacturing leaders should act aggressively to improve efficiency and protect margins
What should manufacturing leaders do next based on the findings in Wipfli’s report? Here are practical action steps to consider:
1. Watch for policy changes
Tariffs and trade policy have been major factors for the manufacturing industry over the past two years. Keep an eye on the latest policy developments in Washington, including the ongoing USMCA renegotiations and any shifts resulting from the midterm elections, as these will often have a material impact on your business.
2. Use today to build for tomorrow
Many economists currently see a structural imbalance in the economy, with growth being propped up largely by wealthy consumers and AI investments. Given that this may be unsustainable, prepare your business for lean times ahead, making targeted investments in efficiency, tariff mitigation and operational effectiveness that will set you up to succeed over the next decade.
3. Be mindful of labor costs
With margins so tight, don’t assume that higher revenue means you have more room to hire. Labor costs are so high that you should focus on improving efficiency and expanding margins before bringing on significant additional headcount.
4. Carefully review costing and quoting
Review your costing and quoting on a regular basis to make sure you are passing on higher prices whenever you can. Your overall goal should be to stop margin erosion wherever you can and turn your growing revenue into higher profits.
Read more
We advise over 7,500 manufacturing businesses on performance, technology, tariffs, taxes, growth and more. Let’s talk about the challenges you face and how we can help you overcome them. Start a conversation.