Meanwhile, reshoring has more than doubled since 2024 and supply chains are stronger — the gap now is turning AI ambition into AI at scale.

Most manufacturers have adopted AI — but almost none have scaled it. Parsec Automation, LLC (Parsec), today released its 2026 State of Manufacturing Industry Report, a global survey of 1,200 manufacturing leaders across executive, operational, and technical roles, which found that 72% have adopted AI in some form while just 10% have deployed it at scale.

Key Takeaways

72% of manufacturers have adopted AI, but only 10% have done so at scale.
More leaders are worried about being too hesitant with AI (60%) than being too aggressive (40%).
65% of manufacturers have begun adopting generative AI (up from 48% in 2024).
70% of manufacturers have completed or are in the process of reshoring (dramatically up from 33% in 2024).
71% of manufacturers describe their supply chains as resilient (up from 50% in 2024).

"Manufacturers are feeling pressure from reshoring imperatives, supply chain volatility, workforce shortages, cost pressure, and accelerating technological change," said Suzanne Rudnitzki, Chief Executive Officer of Parsec. "Operational excellence has shifted from a competitive differentiator to a prerequisite for survival. Business leaders are aware of the challenges ahead of them, and they've taken great strides toward future readiness while overcoming obstacles like fragmented systems, inconsistent data strategies, and workforce constraints."

The March Continues Toward Digital Transformation

More than two-thirds (69%) of manufacturers operate with a hybrid mix of legacy and modern equipment, highlighting the industry's unique straddling of several generations of technology.
Just 37% have a unified, data-driven strategy in place, but 60% are in the implementation or planning phase (up from 40% in 2024). Data proficiency is increasing across the industry, but for most it's still a work in progress.

Top tools and capabilities include AI/ML-enabled decision support (54%), IIoT/Edge devices (50%), and predictive maintenance tools (50%). Manufacturers are investing heavily in tools that enhance visibility, monitoring, and predictive capabilities.

AI Ambition is Accelerating

72% of manufacturers have adopted AI in some form (up from 53% in 2024): 10% at scale across their operations, 22% actively implementing, and the remainder piloting or in early use. 28% have not yet started.
Top AI use cases include quality control (50%), IT operations (46%), and supply chain management (45%).
Barriers to wider adoption include high implementation costs (40%), data privacy and security concerns (39%), and difficulty integrating with existing systems (38%).
When it comes to AI risks, more leaders are concerned about being too hesitant with adoption (60%) than being too aggressive (40%).
65% of manufacturers have begun adopting generative AI, up from 48% in 2024, with the remainder in planning or discovery.

Tariffs Have Spurred a Wave of Reshoring

More than two-thirds of manufacturers (70%) have completed or are in the process of reshoring; just 12% have no plans to reshore. This is a marked difference from 2024, when those numbers were 33% and 38%, respectively.

Top reshoring challenges include increased operational complexity (46%), increased labor costs (44%), and supply chain logistics adjustments (44%).

70% of manufacturers were more focused on cost-cutting even as supply chain resiliency improved during the past 12 months.
Labor Remains a Key Challenge

59% agree that, compared to other industries, manufacturing's inaccurate perception as a labor-intense, low-skill industry makes it harder to recruit top talent.

Manufacturers are split on whether AI could replace at least half of the roles in certain departments—53% say yes; 47% say no.

The most challenging roles to fill include IT/tech specialists (60%), quality assurance staff (49%), and management roles (39%).

Nearly half (45%) cite internal skill gaps as a major challenge when integrating new systems.
Manufacturers' Supply Chains are Stronger than Before

Nearly three-quarters (71%) describe their supply chains as resilient, up from 50% in 2024.
Two-thirds (66%) feel prepared to address current issues, up from 58% in 2024.
Top supply chain challenges include complexity and lack of visibility (34%), raw material shortages and volatility (33%), and transportation disruptions (31%).
Top mitigation strategies include implementing new technology (58%), strengthening supplier relationships (58%), and increasing inventory levels (53%).
"Manufacturers are operating under more complexity than ever before," said Rudnitzki. "Supporting long-term success will come down to two key pillars: people and technology. Leaders should invest in workforce capabilities and support upskilling wherever possible. Technology success will be driven by a strong data foundation, a robust execution layer, and a focus on scaling—not just piloting—AI across networks."

To read the 2026 State of Manufacturing Industry report, visit https://www.parsec-corp.com/report-2026/the-state-of-the-manufacturing-industry.