Manufacturers in New Jersey continued to be challenged by demand volatility and inventory reduction initiatives in just about every sector throughout the course of 2025.  Unfortunately, 2026 appears to be trending that way as well. Several factors are influencing uncertainty in both the domestic and global economies, giving many companies good reason for pause before making any major investments.

Interest Rates

While interest rates have come down, they have not lowered to the extent experts predicted a year ago.  Anticipating money would become less expensive to borrow, many manufacturers began making plans for future expansion.  Popular opinion amongst economists forecast the pace of rate cuts in 2026 will be similar to that experienced in 2025. This will likely keep manufacturing organizations’ expansion initiatives in a “wait and see” mode for 2026.

Transactional Business

The concept of longstanding professional relationships has been falling out of favor for years now. Face-to-face meetings and open dialogue leading to mutually beneficial partnerships are quickly becoming a thing of the past. Traditionally, New Jersey manufacturing companies were built on the strength of relationships, handshakes, and trust. In today’s world of remote working, emails and text messages, manufacturers will be forced to find alternative ways of relationship building.

Labor Quality

If you ask any business leader what they believe their top challenges will be in the coming year, you are almost certain to hear “people” at the top of their list. Today, more than ever, human resource professionals are finding it harder to recruit (and retain) qualified candidates to help build their organizations. Offering a robust and comprehensive benefits package to attract top talent while balancing efforts to minimize escalating costs will be crucial for companies seeking growth in 2026.

While it is impossible to accurately predict what the market holds for 2026 and beyond, one thing is for certain: industry will continue to present new challenges. Growing up here, having had the honor of representing our great state playing football for the Rutgers Scarlet Knights, and now leading an amazing New Jersey company, there is one thing I know for certain: New Jerseyans’ resilience is unparalleled.  When the going gets tough, we Keep Choppin’!