The manufacturing industry drives economic growth by producing a diverse range of goods essential to global markets. In recent years, this sector has seen major expansion. Yet, certain risks may affect the sector’s stability going forward. As such, manufacturing businesses should monitor several developments that could impact the industry this year and adjust their risk management practices accordingly.

1. Technological innovations

The manufacturing industry has experienced rapid technological advancements over the years, and there is no sign of this stopping. The sector’s latest innovations center around Industry 4.0 technology, which refers to artificial intelligence and other digital solutions that can help automate manufacturing processes. As this technology advances, manufacturing companies should stay on top of the latest innovations and consider incorporating these solutions. Failure to do so could cause them to fall short among their competitors and lose possible business opportunities.

2. Cybersecurity exposures

Although beneficial, advancing industry technology poses additional cybersecurity exposures as manufacturing businesses grow more reliant on technology to conduct operations and their supply chains become increasingly interconnected. Some of the sector’s latest technology is evolving so quickly that it’s outpacing the software being developed to protect it. This may leave businesses’ technology susceptible to cyberattacks, which can cause disruptions and costly losses.

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3. Supply chain concerns

Even though the major supply chain disruptions that occurred during the COVID-19 pandemic have dwindled, certain manufacturing inventory shortages and sourcing issues for raw materials will likely persist for the foreseeable future. The impacts of these difficulties on the manufacturing sector are twofold. First, raw material scarcities can minimize supply chain transparency, potentially causing communication breakdowns regarding available inventory and creating confusion amid production processes. Second, derailed deliveries for raw materials may prolong production timelines and delay the transportation of finished goods, compounding operational expenses.

4. Potential policy changes

The legal landscape for the manufacturing industry is ever-changing. In particular, potential changes to global tax laws, tariffs, and trade policies could have considerable effects on manufacturing companies’ existing sourcing issues for raw materials and related production processes, especially those with supply chains that extend overseas. Altogether, manufacturing businesses that neglect to keep up with these shifting regulations and trade rules and don’t modify their operations as needed could face legal ramifications.

Going forward

Various trends are impacting the manufacturing sector this year, emphasizing the importance of staying adaptive. By tracking these developments and addressing their exposures, manufacturing businesses can maintain operational success. Contact us for more industry updates and risk management guidance.

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This document is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. ©2025 Zywave, Inc. All rights reserved.