PNC Financial Services Group has released its mid-year outlook, which notes that thus far in 2025, there’s been one primary factor driving challenges for businesses in the manufacturing industry: uncertainty. It’s a trend that is likely to remain in place as businesses look ahead to the rest of the year. The report says it remains to be seen what the ultimate outcome of policy decisions at the federal level will be.

Tariffs continue to loom large, but it’s not clear yet what their full impact will be on the cost of goods sold. Meanwhile, many businesses are prioritizing how much of any increased expenditures from tariffs they can absorb through costing out activities, or identifying and assigning costs to specific activities within a business process, versus how much they might be able to pass on to customers.

Larger implications include federal tax legislation, as well as geopolitical tensions and their potential impact on energy production and associated costs.

The net effect, according to Mark Tambussi, sales leader in PNC Equipment Finance, is that many businesses remain in wait-and-see mode in terms of business investment and capex spend.

“One way to think about it is a surfing analogy – you ride the wave you’re on,” Tambussi said. “You can’t look ahead to the next wave until you finish your current ride. Businesses are focused on managing what they can for the time being until there’s another wave to hop on, which will inevitably come – it will just be a question of which one to choose. In the meantime, it’s important to stay connected with trusted advisors who can help navigate the uncertainty.”

Even as the overall industry outlook is unclear, growing interest in artificial intelligence (AI) may provide a boost for some businesses in the manufacturing industry. Not only can the technology assist businesses with their own decision making and supply chain management, but it may also provide growth opportunities. “AI is going to continue to play a role in driving the manufacturing sector forward,” Tambussi said. “It’s likely that dollars spent on AI will continue to increase and will be spread around different asset types, including the construction of data centers and the associated energy-producing assets intended to help them achieve grid neutrality.”

Tambussi noted distribution and logistics is another key area of opportunity for businesses, both in manufacturing and beyond. “Every industry has distribution and logistics, and the businesses that can become more effective in how they deliver whatever goods or services they offer their clients will be the ones who achieve growth.”