The third annual “State of Production Health” report by Augury reveals promise amid volatility, as manufacturers exit “pilot purgatory” at faster rates and accelerate their journeys toward truly connected enterprises
Augury, a leader in AI solutions for reliability and process optimization that help industrial companies increase operation-wide productivity, today released its third annual State of Production Health report, which captures the promises, contradictions, and challenges facing manufacturing today. The Augury report features insights and key learnings gleaned from a survey of 500 manufacturing leaders across U.S. and European companies with annual revenues exceeding $100 million.
“The latest State of Production Health survey by Augury captures insights from manufacturing leaders during another period of industry volatility,” said Saar Yoskovitz, CEO and co-founder of Augury. “Pressures on manufacturers are at an all-time high – an aging workforce, tariffs, onshoring, capacity constraints, and rising material costs to name just a few. Yet, the findings are clear: leaders aren’t retreating, they’re doubling down. Rather than reacting to short-term disruptions, they’re scaling AI to drive strategic transformations that provide long-term value.”
Key insights from the Augury report include:
Manufacturers brace for near-term turbulence, expect long-term opportunity
Manufacturing leaders are cognizant of global trade crises and how they may be impacted. Ninety-six percent (96%) say fears of a recession will put further pressure on manufacturers to cut costs, 95% are concerned that U.S. tariffs and retaliatory trade actions will impact manufacturing, and 93% expect supply chain disruptions to increase in the next 12 months.
Despite those uncertainties, 96% of respondents expressed confidence in the future of the manufacturing industry. This optimism may stem from a growing belief that they have the tools—and the momentum—to navigate short-term volatility and build long-term success.
Manufacturers are all-in on AI
AI has earned the trust of manufacturing leaders, with many thrilled by how much it has helped them achieve their production goals. Compared to 2024, three times as many companies have moved beyond “pilot purgatory” and are now deploying AI enterprise-wide and 83% already claim to be using generative AI. Much of this confidence is driven by AI’s role in optimizing production: 83% say they are advanced or very advanced in applying AI to solve production problems. But while confidence might be high, quantifying the impact of AI is still elusive.
Manufacturers may be mistaking adoption for impact
Some manufacturers may have a narrow view on the benefits AI can provide. Capacity constraints rank as the top challenge for 2025, especially for U.S. manufacturers responding to the push for American-made goods. Yet despite AI’s clear potential to expand production capacity, increasing capacity doesn’t even rank among the top three areas where manufacturers want AI to help, the Augury report finds.
Manufacturers are also rating themselves highly for AI adoption while struggling with achieving foundational elements of implementing AI strategies, like digital change management and the ability to connect vendors within existing ecosystems. This may be problematic in the near future as 97% are eyeing agentic AI, but don’t have the right foundation for it to be effective given those limitations.
Manufacturers look forward to the AI-driven workforce transformation
Tenured talent has been leaving the manufacturing sector in waves—dubbed the “silver tsunami”—and it continues to keep industry leaders up at night. The aging workforce ties rising labor costs for top workforce concerns, and, as 2.8 million manufacturing workers near retirement age, 95% of respondents fear the mass exodus of tenured workers will exacerbate knowledge gaps (up from 91% year over year).
Fortunately, leaders have a plan: bridging labor gaps with sophisticated AI technology. Ninety-nine percent (99%) of leaders say advanced tech will positively impact upskilling efforts, and 97% believe AI and technology will create jobs. These findings show that manufacturing is increasingly aware of AI as a tool to retain domain expertise and enable workforces, rather than displacing jobs.
“Industrial leaders have made progress in their AI journeys, but even those leaving the pilot stage must continue to poke holes in their strategies,” Yoskovitz added. “That means asking smart questions like, ‘What untapped capacity exists in my plants, and how can AI help?’ or ‘Is my ecosystem of tools interconnected or siloed?’ As a cutting-edge and resilient industry that has long been the backbone of the global economy, I’m confident that manufacturers will continue to ask these questions, and those that do will not only solve today’s problems but also unlock unparalleled production health.” according to Augury.
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