Manufacturing trends for 2025

manufacturing trends for 2025
As we approach 2025, the manufacturing industry continues to evolve rapidly. 

While the buzzwords around digitalisation and technology adoption continue to dominate the conversation, it’s the real-world application of these trends that will matter most. For smaller manufacturers, staying ahead means understanding how these shifts can benefit businesses, from improving efficiency to retaining talent. 

Below, we explore key trends that will shape the future of manufacturing—and how they can be practically applied.

1. New talent for a new age

One of the biggest challenges manufacturers are facing is the ongoing skills gap. In 2024 alone, job separations in the manufacturing sector reached 330,000 per month, as workers retired or moved to other industries. This issue is even more pressing for smaller businesses, which may not have the resources to attract top talent in the same way large corporations do.

However, there are promising signs that the tide is turning. Since November 2023, employment in the sector has seen a steady rise, with an additional 8,000 jobs created in April 2024. The key to closing the skills gap lies in the diversification of the workforce and upskilling current employees. Small manufacturers can take advantage of government-supported training schemes or apprenticeships to build a skilled workforce. These initiatives not only help in bridging the skills gap but also create loyalty within the team, leading to lower turnover. 

(Bureau of Labour Statistics, Monthly Employment Report for 2024)

2. Small-scale automation with big results

While terms like artificial intelligence (AI) and robotics often sound like something reserved for large factories, automation is increasingly becoming a game changer for small manufacturers too. The global trend toward automation is set to continue into 2025, with more small businesses recognising its potential to boost efficiency without requiring massive investment.

In fact, 64% of small manufacturers already report that automating simple tasks, such as inventory tracking or production scheduling, has significantly increased productivity (PwC). By 2025, we expect to see even more small businesses adopting automation on a manageable scale, using affordable ERP tools to streamline repetitive processes. According to a report by McKinsey, the demand for automation solutions tailored to smaller operations is growing as businesses seek ways to improve efficiency without heavy upfront costs (McKinsey).

Small-scale automation doesn’t mean a complete overhaul. Simple tools—such as ERP software that automates order processing, conveyor belt systems, or digital inventory management—can deliver powerful results. These smaller, cost-effective systems are projected to see wider adoption as smaller manufacturers look for ways to remain competitive.

3. Sustainability as a business driver

Sustainability is no longer a buzzword; it’s becoming a core part of business strategies across the manufacturing sector. The UK government’s commitment to achieving net-zero emissions by 2050, alongside consumer demand for eco-friendly products, is driving businesses of all sizes to rethink their environmental impact. According to research, 46% of manufacturers plan to invest in sustainable practices for commercial reasons over the next five years (UK Government).

For small manufacturers, sustainability can be an opportunity rather than a burden. Simple changes like upgrading to energy-efficient machinery, optimising material usage, or reducing waste through better production planning can not only reduce costs but also attract eco-conscious customers. In fact, consumers are now willing to pay more for products that have been produced with sustainable methods (UK Government), presenting a clear financial incentive.

4. The power of data

Data-driven decision-making is one of the most exciting trends in manufacturing, and it’s no longer limited to big players. The rise of Internet of Things (IoT) devices, even in small-scale operations, has allowed businesses to collect real-time data from machines, inventories, and supply chains. For example, predictive maintenance—using data to predict when equipment will fail—can reduce downtime by 30% (McKinsey).

For smaller manufacturers, even starting with basic data collection and analysis can provide valuable insights. This might mean using software to track machine performance, improving production efficiency, or ensuring better stock control. 

5. Staying close to your customers

Global supply chain disruptions over the last few years have driven a renewed interest in localised manufacturing. Many businesses are now turning to hyper-local production models to reduce the risk of delays and rising transport costs. For smaller manufacturers, producing closer to home can be a significant advantage, allowing them to respond faster to customer demands and ensure better quality control.

Micro-factories and smaller production units are becoming more popular, enabling manufacturers to be nimble and adaptable. By focusing on local markets, small manufacturers can differentiate themselves from larger competitors who may be more reliant on global supply chains. Additionally, offering customisation and personalisation—something small businesses excel at—can help drive customer loyalty.

Preparing for 2025

The trends shaping manufacturing in 2025 represent a mix of innovation, sustainability, and adaptability. For smaller manufacturers, the challenge lies in identifying how these trends can be applied at a manageable scale. Starting with small investments in automation, data analysis, and sustainable practices will allow your business to not only keep up with industry developments but also thrive in a competitive market.