Wisconsin manufacturers are more confident about the economy in 2025 despite tariffs, a new report shows.
The annual Wisconsin Manufacturing Report, conducted by the Wisconsin Center for Manufacturing and Productivity, includes the results of a survey of more than 400 manufacturers and a series of focus groups. The quantitative survey was conducted July 30 through Aug. 19 and has a margin of error of 4.9%.
Here are some of the key findings.
Wisconsin manufacturers are more confident about economy but are still hesitant to make large capital investments
Wisconsin manufacturers are more confident about the economy in 2025 than they were in 2024, the report shows.
Roughly two-thirds of manufacturers said Wisconsin’s business climate is headed in the right direction, the highest percentage since 2021, the first year the survey was conducted. Additionally, 46% of manufacturers said the state’s economy is mostly flat while one-in-three believe the economy is growing.
But while manufacturers expect revenues and productivity to increase, the survey shows uncertain market conditions slow capital expenditures. Forty-one percent of manufactures expect to see an increase in gross revenues and 36% expect to see an increase in profitability while only 30% expect to increase capital expenditures — the former two seeing a five percentage point increase from 2024 while capital expenditures saw just a one point increase.
Manufacturers are still making investments, however, just not capital investments. From 2024 to 2025, the top areas manufacturers invested in included maximizing productivity (65%), expanding sales within the U.S. (62%), systems, technology and automation (49%) and workplace and company culture (47%).
Manufacturers are split on tariffs despite a majority of them feeling some effects
The report found that the manufacturing sector has not been spared from President Donald Trump’s sweeping tariff and trade policy as 72% of Wisconsin manufacturers said tariffs affect them. Fifty-five percent of manufacturers in the state said cost increases have been the biggest impact and 32% reported that uncertainty or an inability to plan was the biggest impact.
Larger companies are feeling the brunt of the impact, with 81% of companies with a revenue of $5 million or more feeling an impact in across the board, compared to 72% of companies that see $1 million to $5 million in revenue and 53% of companies with under $1 million in revenue.
According to the report, 38% of manufacturers said tariffs and trade policy were an issue impacting their company’s success, and 23% listed tariffs as one of the most important issues affecting future success and company outlook.
Wisconsin manufacturers are divided on whether trade negotiation would help or hurt them, with a notable differnce by revenue level. When asked if trade negotiations would help or hurt manufacturing businesses, 28% of manufacturers said they would help, 26% said negoatiations would hurt their business, 16% said neither and 21% said it doesn’t apply.
When looking specifically at revenue levels, companies under $1 million and between $1 to $5 million said trade negotiations would help while companies with revenue over $5 million said negotiations would hurt.
Workforce remains a top concern for manufacturers in Wisconsin despite signs of easing labor challenges and AI usage increases
In recent years, workforce retention has remained a top concern for Wisconsin manufacturers struggling to find and keep enough qualified workers to meet demand. While manufacturing provides more than 470,000 jobs and brings more than $66 billion into Wisconsin’s economy, the sector continues to decline in the state despite growth nationally.
While the report found that workforce challenges have begun to ease, workforce retention and recruitment remains one of the biggest concerns for manufacturers in the state, with 51% of companies listed finding and retaining skilled employees as a top issue affecting their business.
Despite the share of companies that said hiring is very difficult was down to 31% in 2025 — down one percentage point from 2024 and 13 points from 2023 — the report found that 54% of manufacturers said they are currently hiring. While this may be down 4 percentage points from 2021’s post-pandemic levels, it is still a notable amount.
Increasing wages and salaries and offering employee trainings were the two most common ways companies looked to address potential long-term workforce challenges — 61% and 54%, respectively.
One notable change between 2024 and 2025 is the increase in how many manufacturers have turned to artificial intelligence to mitigate workforce challenges. The use of artificial intelligence to address workforce shortages has tripled since 2023, with 28% of companies now utilizing it. From 2024 to 2025, there was a 10 percentage point increase in companies that utilize AI.
Despite more manufacturers utilizing AI, only 8% said it would fundamentally change businesses like theirs while 61% said AI is going to just be another piece of technology among many.
Additionally, the report found that 47% of companies looked to automating or implementing new technologies to address worker shortages, a five percentage point increase from 2024.
Anna Kleiber can be reached at akleiber@gannett.com.
This article originally appeared on Milwaukee Journal Sentinel: How do Wisconsin manufacturers feel about Trump’s tariffs? Here’s what a new survey found
Reporting by Anna Kleiber, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
USA TODAY Network via Reuters Connect
