By: Mark Henry and John Giordano
Partners and Co-Leaders of the Manufacturing and Distribution
Industry Practice at Citrin Cooperman Advisors LLC
We polled over 500 manufacturing and distribution business leaders to understand the trends, opportunities, and challenges this sector is experiencing today and what they are doing to stay ahead of the curve. Slowing growth in revenues and earnings, lasting and new supply chain pressures, rising costs and inflation, and new tariffs are top of mind for leaders. Citrin Cooperman’s 2025 Manufacturing and Distribution Pulse Survey Report explores important insights into how leaders are mitigating these risks and headwinds.
CHALLENGES FACED IN PAST YEAR
To get a feel for the day-to-day business agendas and actions of manufacturing and distribution companies over the past year, we asked what initiatives or challenges companies faced. The top five most common challenges respondents experienced in the past year are*:
- Increase in employee costs – 40%
- Opening of a new warehouse or manufacturing facility – 35%
- Implementation of a new ERP system – 31%
- Applied administrative/service fees to products and services – 29%
- Sale or contemplated the sale of a business division – 27%
- Cyber incident or breach – 26%
*Respondents were able to make multiple selections.
CHALLENGES AHEAD
2024’s agenda items often morph into this year’s priorities and meld with new issues. From the list of multiple challenges leaders were presented in our 2025 survey, many are of relatively equal weight and equivalent sources of concern. These challenges span high cost of capital, tech upskilling, ability to finance growth, and keeping up with technology changes. Multiple plates will be spinning in C-suites and through all layers of operations in the year ahead and will need to be managed to sustain revenue growth and profitability.
TARIFF IMPACTS AND MITIGATION PLANS
Real or threatened new tariffs and their disruptive effects — good, bad, or other — are affecting markets, clouding economic forecasts, and have the full attention of manufacturing and distribution company leaders. Seven in ten respondents say their companies will be directly or indirectly impacted if tariffs are increased. Half say tariffs will have negative impacts on business. It is early in the process of adapting to tariff changes, yet only 15% are presently exploring tax strategies to mitigate tariff exposure. We suspect this number will continue to rise over the next several months.
INFLATION AND RISING COSTS
Our 2025 survey was fielded in February 2025 at the turn of administration. While economists projected flattening of rising costs and inflation reductions, as of Q2, those projections are in flux. The big takeaway from respondents is that few executives are confident about what comes next regarding the effects of inflation and rising costs. Only 27% say they strongly agree that they anticipate customer spending increasing. Only 21% strongly agree that future interest rate declines have increased business spending habits.
LABOR SHORTAGES
If those factors are not enough to top agendas, the labor force has its own challenges and executive demands. One in five (21%) respondents have experienced labor shortages in the past 12 months. Of these, over half say their sales force (57%) and skilled labor including tech skilled workers (54%) are most impacted.
The challenges facing manufacturing and distribution companies are evolving, but so are the strategies to overcome them. Citrin Cooperman’s 2025 Manufacturing and Distribution Pulse Survey Report offers actionable insights to help leaders navigate rising costs, labor shortages, tariff impacts, and more. Access the report here and explore practical steps to strengthen your business.
“Citrin Cooperman” is the brand name under which Citrin Cooperman Advisors LLC and Citrin Cooperman & Company, LLP, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards.
