Midyear 2025 Industry Outlook: Industrial Manufacturing & Engineering by Victoria Reyes

The Industrial Goods and Engineering is a key sector at Pacific, with Victoria Reyes leading the practice across EMEA. In the past year, this sector has accounted for more than 35% of all Pacific leadership placements globally. The high demand for leaders in Operational Excellence, Lean, Supply Chain & Logistics, Quality, EHS, Maintenance, and Plant Management reflects the areas where companies are making their most significant investments.

With that in mind, the Industrial Manufacturing & Engineering sector experienced modest yet uneven growth in the first half of 2025 globally. Production output gradually improved despite ongoing challenges from trade tensions and persistent inflation. The U.S. market showed small production gains, and manufacturing indicators stabilized. Europe’s manufacturing conditions improved notably, reaching their best levels since early 2022, supported by stabilizing orders and reduced energy costs. Companies that have adopted digital tools, optimized their supply chains, and invested in agility have outperformed their peers, who remain tied to outdated operating models.

Key Challenges

The remainder of the year will bring several notable challenges, such as:

• Supply Chain Volatility: Continued disruptions, particularly shortages of critical minerals, will put pressure on production timelines and profitability.

• Rising Energy and Material Costs: Energy prices are expected to rise again, particularly in winter, leading to increased operational costs. Tight markets for specialty alloys and rare-earth minerals are also likely to persist.
• Talent Shortages: Growing gaps in skilled labor, particularly in advanced manufacturing roles (robotics, automation, data science), will intensify talent competition.
• Geopolitical Uncertainty: Ongoing global tensions, particularly in U.S.-China relations, could lead to additional trade barriers or disruptions.

Despite these challenges, several positive trends will shape the rest of 2025, so here are some predictions:

• Modest growth (1–3% YoY): Sectors such as aerospace & defense, as well as aftermarket services, are likely to continue leading the growth in this space.
• Acceleration of Digital Transformation: The increased adoption of Industry 4.0 solutions, such as digital twins, predictive analytics, and AI-driven quality control, will become critical differentiators.
• Increased Mergers & Acquisitions: Strategic acquisitions of niche technology and materials specialists are expected to rise, enabling larger manufacturers to acquire key competencies quickly.
• Sustainability Leadership: Organizations demonstrating tangible progress toward sustainability goals—such as carbon reduction and circular-economy initiatives—will gain significant competitive advantages in the marketplace

Hiring Trends & Skills in Demand

The war for talent has shifted, intensifying demand for professionals skilled in digital transformation, data analytics, additive manufacturing (3D printing), robotics, and advanced materials. Senior leaders who can effectively integrate digital strategies and sustainability initiatives into their core operations will be highly sought after.

Diversity & Inclusion Insights

Despite external pressures, manufacturing organisations continue to prioritise diversity and inclusion, with many targeting increased representation in senior roles, especially engineering leadership. However, while demographic diversity remains essential, organizations are increasingly recognizing diversity of thought as a key driver of business performance. High-performing companies understand that true diversity extends beyond representation; it is about leveraging varied perspectives and expertise to enhance decision-making, foster innovation, and strengthen resilience.

Top 3 Career Tips for Senior Leaders

1. Showcase Quantifiable Results

Present clear, quantifiable achievements on your LinkedIn profile and CV. Metrics such as revenue growth, cost savings, or operational efficiencies immediately demonstrate your value and leadership effectiveness. However, numbers alone aren’t enough. Complement them with strategic storytelling that reflects your ability to adapt, learn from failure, and pivot when necessary. In today’s volatile landscape, showcasing agility and resilience, your capacity to thrive in ambiguity and lead through change positions you as a forward-thinking, future-ready leader.

2. Demonstrate Authentic Leadership

Leadership remains one of the most valued skills across organizations. Authentic leadership is developed over time, marked by the ability to inspire teams, influence positive change, and consistently lead by example. Highlight instances where your leadership has improved performance, culture, or employee engagement.

3. Build Your Professional and Social Presence

Engage intentionally across both professional and social platforms. Seek out mentoring opportunities, contribute to community initiatives, and actively support the growth of others by writing thoughtful recommendations or making strategic introductions. These actions not only demonstrate your commitment to giving back but also highlight your leadership beyond your formal role. By consistently and meaningfully showing up, you reinforce your reputation as a values-driven leader who elevates others.

If you are a senior leader in the Industrial Manufacturing and Engineering Sector, connect with Victoria Reyes to schedule a chat about navigating your next career move or to discuss talent acquisition or diversity challenges.