🔒How will potential tariffs impact CT manufacturers/supply chains? It’s a key issue in 2025

The change of administration in 2025 along with wider global instability brings questions and uncertainty for Connecticut manufacturers, and these factors may drive some of the dominant trends to watch in the coming year.

The focus on supply chain issues could intensify, sparking creative solutions including reshoring and collaboration. Technology transformations may also gather pace in the coming year, not least as a way to mitigate a still-tight labor market.

Here are some manufacturing industry trends to watch in 2025.

Boosting the supply chain

Connecticut’s Chief Manufacturing Officer Paul Lavoie expects the trends toward reshoring and near-shoring production to accelerate in 2025, as companies, particularly large original equipment manufacturers (OEMs), try to reduce their exposure to the risks of global instability.

“We will see manufacturing companies shorten supply chains, move manufacturing back to Connecticut from overseas and work to build out domestic supply chains,” he predicted.

That movement could also be driven by domestic policies, like incoming President Donald Trump’s promise of steep tariffs on imported goods.

New Britain’s Stanley Black & Decker is among those who have already said they will shift production to different parts of the world in order to mitigate the effects of tariffs.

“Everyone wants to talk about the ‘T’ word – tariffs,” said Jeffrey J. White, who leads the manufacturing industry team at law firm Robinson+Cole. “We will be monitoring these developments closely, including on the raw material side.”

White, who provides counseling and dispute resolution advice for manufacturers and distributors, said it’s also important not to lose sight of the impact of tariffs on foreign companies that have operations in the United States.

“Several of our clients who have subsidiaries based in Connecticut are discussing whether to expand their manufacturing operations in Connecticut,” he said. “The potential expansion is related to tariffs, but also to maintain flexibility in their operations throughout the world.”

Digital transformation

Many of the companies that make up the supply chain are busy with their own forward planning.

Brittany Isherwood is president and CEO of Burke Aerospace, headquartered in Farmington. The company has provided electric discharge machining and milling services to the aerospace, industrial gas turbine and defense industries for over 60 years.

She’s bullish about the coming year in aerospace.

“We’re seeing continued growth, both driven by the military and commercial demand, which is excellent because there’s been times where it was only one product line that was growing, but we’re seeing growth on both military and commercial,” she said.

Isherwood’s company is some way into a digital transformation, investing in equipment that’s entirely run on a network and can implement the model-based definition standards being encouraged by many of its OEM customers. She says that transformation will continue, but it also brings its own challenges.

“There’s always going to be an increased risk of cyber threats,” she said. “Before we even made the huge investment in equipment, we invested heavily in helping to use better firewalls, encryption, multi-factor authentication.”

Lavoie confirms he’s seeing a willingness across many companies to invest in new technologies, including additive manufacturing, robotics and automation, and artificial intelligence to drive efficiency and productivity in a tight labor market.

White adds that cross-company collaborations are becoming more common as a way to meet the evolving needs of big customers, including for federal contracts.

“There are pros and cons to such collaborative efforts, and we have been advising clients how to avoid the major pitfalls with sharing your intellectual property with other companies, including competitors,” he said. “In 2025, I expect these collaborative efforts to continue.”

Workforce challenges/solutions

Labor market challenges are nothing new, but companies are getting creative about hiring, and some are beginning to see progress.

Isherwood’s 70-person company made 15 hires in 2024, and expects to continue hiring through 2025, both to replace retirees and support growth.

“One of our strategies is employee retention, because we know that without our existing employees, we would struggle,” Isherwood said. A lot of Burke Aerospace’s training is in-house because of the company’s niche market; it has also begun hiring employees right out of high school and college.

Isherwood says wages have to be competitive with those offered at the OEMs, and the company also offers a robust career ladder and benefits like tuition reimbursement.

Haley Nemeth is the third generation of family leadership at Jonal Laboratories in Meriden. The company makes rubber seals for aerospace applications.

She says Jonal made investments in new real estate, equipment and in hiring in 2024. She expects that to slow down a little in 2025, but says hiring will not stop completely.

“I still have a couple more positions, particularly in engineering and chemistry that I need to fill,” Nemeth said. “It’s hard to find talent, which is why if you find somebody, even if you don’t need them, you bring them on — at least that’s our philosophy.”

Like Isherwood, Nemeth says it can be hard to compete for talent with their big customers, but she touts the unique ability in a small business to get a taste for many different roles and skill sets.

“At a big company you do one function every day, day in and day out, and you get a good salary, but you don’t have as much job security,” she said. “We have to find a unique person that wants to wear many hats, fire on all cylinders and get their hands dirty.”

Efforts like those at Burke Aerospace and Jonal Laboratories to create linkages with the education sector are now becoming more typical, according to Lavoie.

“Innovative companies are reaching out to academia, helping to shape curriculum, and building strong pathways from academia into the workplace,” he said. “This requires manufacturing leaders to get out in the community and to serve on advisory boards, host tours of students, implement apprenticeships and robust training programs and to make a commitment to develop people.”