As manufacturers bet on growth, insurance advisors are critical to manage what’s next

U.S. manufacturers are operating in an environment of elevated risks as they navigate trade policy uncertainty, shifting regulations, potential supply chain volatility and labor market challenges. Despite these pressures – and recent softening in manufacturing sector sentiment – new research from Nationwide shows that industry confidence remains high. Eight in 10 manufacturing leaders expect positive business performance over the next 12 months, and insurance agents are uniquely positioned to help convert that confidence into long-term resilience.

Nationwide’s survey was fielded in April 2025 with 400 U.S. manufacturers and 200 independent insurance agents who support the sector. The research paints a clear picture of where opportunities and vulnerabilities are emerging – revealing manufacturers’ bullish outlook alongside agents’ perspective on the importance of strategic partnerships around risk mitigation and long-term planning.   

“Manufacturers are leaning into opportunity, and they’re looking for partners who can keep pace,” said Erika Melander, head of the national manufacturing practice for Nationwide. “This moment calls for tight alignment between business leaders and their insurance advisors to anticipate exposures, rethink risk mitigation strategies, and adapt to changing conditions.”

Trade policy and supply chain pressures
Trade policy is a potential double-edged sword for manufacturers. While 64% of manufacturing leaders expect tariffs to positively impact their business over the next year, they remain concerned about the effects on raw material costs, profit margins and supplier availability. Nearly half of agents agree with manufacturers’ concerns, saying tariffs are already weighing on clients by forcing price increases and weakening international competitiveness.

Manufacturers are responding with calculated steps to strengthen operations and reduce exposure:

• 64% are expanding their supplier base
• 52% are frontloading inventory
• 48% have reviewed or updated their business continuity plans

While global partners remain important for 75% of manufacturers, 35% report shifting to more U.S.-based suppliers due to trade uncertainty, with another 50% considering similar moves. Still, nearly half (45%) expect to rely on tariffed imports, fueling concern for 87% who worry that shifting trade policies could cause further supply chain delays and pricing disruptions. To manage financial strain:

• 32% of manufacturers plan to pass most rising costs on to customers
• 44% will absorb some costs and raise prices moderately
• 23% plan to absorb most rising costs without passing them on to customers

Agents echo this concern, with 7 in 10 calling supply chain disruption a serious and growing threat for manufacturers. Encouragingly, agents say about half of their clients have proactively reviewed insurance coverage to address potential disruption, and three-quarters of agents report growing client interest in endorsements such as contingent business interruption.

Technology brings opportunity – and risk
Technology is also seen as a critical driver of growth in the year ahead. Manufacturers are widely adopting digital tools to streamline operations, with:

• 91% implementing inventory management technology
• 83% integrating Internet of Things (IoT) solutions
• 83% adopting predictive maintenance technology
• 82% using robotics for automation of physical tasks

Meanwhile, many manufacturers are also leaning into AI technology to improve efficiency and stay competitive. Reported benefits from early AI adopters include improved forecasting, cost savings, product quality and supply chain agility.

Agents are in tune with this digital shift but flag potential risks, especially around AI. Key challenges they cited include risk of product defects (41%), integration challenges (40%), high costs (39%) and lack of internal expertise (34%).  

Talent remains a top concern
Manufacturers and agents align on another core challenge: talent.

• 64% of manufacturers report difficulty attracting and retaining skilled workers
• 28% say they can’t find candidates with critical skills
• 27% struggle to meet qualified workers’ compensation expectations
• 2 in 3 say younger workers do not view manufacturing as a desirable career path
• 7 in 10 agents say this workforce challenge is serious – and unlikely to improve soon

This ongoing labor strain has implications for workplace safety, continuity planning, and future operational capacity.

A strong role for insurance advisors
As manufacturers prepare for what’s next, agents are playing a valuable role in helping clients navigate risk. A focused, flexible strategy remains essential – and agents are increasingly seen as key partners in shaping it. Melander says manufacturers should prioritize three critical areas to strengthen their position in a complex and evolving economy:

• Technology: Continue scaling technology, from inventory management systems and automation to AI, to drive efficiency and resilience. As reliance on technology grows, 31% of manufacturers say strengthening their cybersecurity is one of their largest business opportunities over the next year, opening doors for agents to guide clients on cyber liability solutions.
• Talent: Redefine what a career in manufacturing looks like, emphasizing innovation, job security and purpose to appeal to the next generation.
• Risk Management: Partner with specialized insurance and risk advisors to reassess exposures, tailor coverage and develop mitigation strategies that support long-term needs. The good news: 84% of agents say they are familiar with how clients are responding to changing dynamics and 76% feel confident advising on insurance and risk mitigation related to global trade uncertainty. With 82% of manufacturers actively seeking this type of guidance, the agent’s role has never been more critical.

“Manufacturers who treat risk management as a strategic priority – not just a safety net – will be better equipped to weather volatility and sustain growth,” said Melander. “By aligning their talent strategy, embracing technology and working with experienced insurance partners to anticipate and mitigate risk, they’re building a more resilient and competitive future.”

Learn more about manufacturing insurance and risk management resources, and view the full findings from Nationwide’s survey here.

Methodology:
Nationwide commissioned Edelman Data and Intelligence to conduct a national online survey of 400 U.S. manufacturing business decision makers and 200 independent insurance agents who work with manufacturing clients from April 4 to April 21, 2025.