CLEVELAND, Ohio – Economic uncertainty is today the single largest factor holding back meaningful expansion in Ohio’s manufacturing sector, according to a report released Monday by the Manufacturing Advocacy and Growth Network, or Magnet.
Still, the report, “Steady Under Pressure: The State of Ohio Manufacturing in 2025,” also emphasized most manufacturers project an increase in hiring this year while investing more toward improving workplace culture.
“This is not a story of retreat,” Ethan Karp, president and CEO of Magnet, said in a statement. “Manufacturers are operating in a harder environment, but they are adapting in practical ways. They are being disciplined, focused, and intentional about how they move forward. Despite the headwinds, they are optimistic about growing in the year ahead.”
Magnet polled approximately 300 manufacturing leaders for the survey that represent more than 30,000 employees.
According to the report, 43% of respondents said economic uncertainty is hampering growth, up from 33% in 2023. Furthermore, 20% replied that this uncertainty is “significantly” impacting their business, nearly three times the rate recorded in 2023.
“The impact is showing up in more risk-adverse behavior,” the report noted. “Faced with volatile demand, input costs, and shifting policy signals, manufacturers are pulling back on discretionary investment, narrowing innovation efforts, and prioritizing operational resilience over expansion.”
Revenues also took a hit in 2025, the survey shows, as just 48% reported they witnessed revenue growth last year, down from 65% in 2023 and one of the weakest results since 2021.
Even so, optimism remains strong, Magnet found. The survey reports that 51% responded that hiring was flat throughout 2025, while 70% of manufacturers expect headcount to grow in 2026. This is mostly driven by a projected increase in sales to existing customers, not new business.
More than half of the participants anticipate increasing employment rolls between 5% and 10%, “signaling confidence that revenue is going to increase in the year ahead.”
The report also noted that 82% of the company participants said they were actively improving workplace culture, 70% were transferring knowledge from retiring workers to younger employees and 56% were engaged with high schools and vocational schools to build interest in careers.
Other results of the survey show that while more manufacturers in Ohio are willing to integrate new technologies into their operations, the rate of adoption is still slow and is “well below the acceleration seen earlier in the decade.”
Some 39% of companies reported testing simple artificial intelligence tools, with far fewer seeing measurable returns at this time, the report shows.
Meanwhile, the report noted that innovation is pivoting from the development of new products and is instead focused on process improvements. According to the survey, 74% said they would devote more tech to process improvements, while 72% said they would focus on production technology upgrades.
And companies report that tariffs have had a mixed effect on business. According to the survey, just 9% of those manufacturers polled have brought back operations to the United States in the face of tariffs levied by the Trump administration. While most of that work – 60% – is reshored from China, none of the manufacturers list reshoring as a top strategic priority for 2026, the report found.
One-third of the manufacturers report that tariffs have impacted sales. Of those, 15% witnessed gains and 18% saw decreases in business. At the same time, 24% said they expect future gains, while 43% reported no material impact from the tariffs.
Tariffs, the report found, “are amplifying differences between firms – rewarding those with pricing power, operational flexibility, or domestic alternatives, while penalizing those forced to absorb higher costs. The result is a slow sorting process, not a sudden reshoring wave.”