Labor deficit remains top hurdle for manufacturers, survey finds

Labor—with dose of supply chain and trade policy (i.e., tariffs) worry—has a clear majority of manufacturers concerned for 2026, according to a new study commissioned by the vendor of an AI data platform.

According to CADDi's 2026 Manufacturing Outlook Study, 79% of manufacturing leaders report the skilled labor shortage as a major external challenge for the new year, a 7% increase over the 72% reported in 2025.

In response, 62% of respondents said they are aiming to improve worker recruitment and retention to compensate for the gap.

See also: Workforce shortages, supply chain struggles also high on list of worries among surveyed Smart Industry readers

“Manufacturing teams are facing shrinking headcounts despite rising volatility and pressure,” said Yushiro Kato, CEO and co-founder of CADDi. “To ease the labor shortage’s impact, companies need faster answers, stronger cost visibility and data that lets them act with confidence.”

Rising direct costs (61%), uncertain trade policy (47%). and geopolitical supply chain disruptions (38%) also rank among manufacturers’ top concerns for 2026 in the CADDi survey.

More results from the report:

• 69% of organizations plan to invest in physical assets like robots or cobots and equipment in the coming year, a 9% increase from last year.
• 33% are planning investments in operational systems like MES and ERP, down from 60% in 2025.

“This reflects a pragmatic turn toward technologies that deliver measurable output gains on the shop floor. Machine monitoring, sensors and predictive analytics continue to strengthen quality and uptime, while AI moves upstream into forecasting and decision support,” according to the report.

See also: When AI understands the plant

Tokyo- and Chicago-based CADDi's AI data platform is designed to modernize manufacturing by digitizing and centralizing supply chain and engineering data.