Industrial manufacturers are navigating a landscape marked by both confidence and uncertainty, according to the EY-Parthenon 2026 Growth Survey. The survey indicates that the competitive edge in the sector will not stem merely from identifying growth opportunities but from establishing flexible operating models that can effectively leverage artificial intelligence (AI), partnerships, pricing strategies, and innovation.
Shifting Growth Strategies Among Industrial Manufacturers
Despite a volatile market, manufacturers are actively pursuing growth rather than merely protecting margins. Many are revising their strategies and setting new objectives aimed at faster adaptation than their competitors. The survey reveals that manufacturers focus less on traditional product and market development compared to other industries; 34% identified this as a growth lever, in contrast to 53% across sectors. Instead, they are prioritizing strategic AI, partnerships, supply chain optimization, and innovative product or service offerings.
The surge in partnerships suggests a recognition among manufacturers that they cannot develop every necessary growth capability internally. As technology evolves, collaborations may offer quicker access to new capabilities and markets than organic development would allow.
Corporate venture building and pricing optimization have emerged as key growth levers with significant profit and loss implications. Manufacturers are moving beyond traditional business models to embrace sharper commercial strategies and faster testing of opportunities. In a market characterized by factors like tariff exposure and shifting customer expectations, effective pricing strategies are becoming critical for margin protection and identifying customer willingness to pay for enhanced performance or service.
While AI is integral to industrial growth strategies, the survey highlights some discrepancies in its application. Although 88% of companies are utilizing AI in their growth strategies, many are focusing more on efficiency than on impact-driven growth decisions. Industrial leaders exhibit more caution regarding AI than their peers in other sectors; 71% view it as beneficial for growth compared to 78% across industries, while 24% see potential downsides, significantly higher than the 16% overall.
The findings underscore a paradox within industrial manufacturing: leaders show confidence in targeting growth initiatives and claim a firm grasp of leveraging data and AI, yet only 54% report that more than half of their initiatives meet expectations. This suggests that while manufacturers excel at optimizing existing operations, they encounter challenges when trying to transform their operating models. Issues such as skills gaps, risk and compliance concerns, and outdated infrastructure hinder the scaling of new growth initiatives.
Moving forward, manufacturing leaders should concentrate on several key areas to enhance growth decision-making and execution: establishing a digital connection from engineering to sales, funding integrated growth platforms rather than isolated efforts, and reworking commercial decision-making around pricing and customer value. Additionally, they should view risk management as an enabler of growth and leverage partnerships and acquisition strategies to speed up capability development.
The potential for rapid growth lies in manufacturers’ ability to develop adaptive operating models that cohesively integrate AI, pricing strategies, partnerships, and innovation into a unified growth framework.
