From automation and labor shortages to tariff uncertainty and economic caution, Mitsubishi HC Capital Canada forecasts the evolving factors influencing business growth
Mitsubishi HC Capital Canada, a leading non-bank, non-captive finance provider, has identified four key trends that will shape Canada’s industrial equipment sector in 2026. After years of volatility, the sector is entering a critical phase marked by cautious investment strategies, technology-driven transformation, and evolving trade dynamics. Canadian manufacturers and industrial operators are navigating a landscape influenced by global supply chain realignment, rising automation adoption, and persistent labor shortages, all while responding to tariff uncertainty and monetary policy shifts.
The industrial equipment market spans sectors such as manufacturing, technology/automation, forklifts/material handling, and energy with each facing unique pressures. For example, manufacturers are accelerating investments in robotics and AI-driven production systems to offset workforce gaps, while material handling firms are prioritizing equipment upgrades to meet efficiency standards. At the same time, logistics companies are exploring warehouse automation and electrification to remain competitive amid tightening environmental regulations. These trends underscore the need for businesses to balance short-term risk management with long-term strategic planning.
Workforce Gaps Drive Automation and Upskilling
Labor shortages continue to challenge the sector, accelerating a shift toward automation, robotics, and workforce upskilling. Across Canada, companies are increasingly investing in technology that enhances efficiency, whether through warehouse automation or AI-enabled decision tools.
This talent gap is accelerating automation adoption. According to the 2025 Advanced Manufacturing Outlook survey, 66% of manufacturers plan to invest in robotics and automation and 51% in AI technologies. Automotive suppliers are deploying collaborative robots to maintain output, while food processors are adopting automated packaging systems to offset workforce shortages.
Supply Chain Stabilization and Cautious Investment
Following several years of volatility, supply chain constraints have largely subsided, and most equipment types – from CNC machines to heavy-duty forklifts – is now readily available. However, investment activity has slowed as businesses take a more cautious stance amid ongoing economic uncertainty.
“We’re still seeing many companies delaying major purchases until they have greater visibility into future demand,” said Félix Beauregard, Vice President of Equipment for Mitsubishi HC Capital Canada. “Our advice to business owners is not to wait, but to take advantage of your competition’s hesitation to spur healthy growth for your business.”
Tariffs Create Investment Pause
Tariff volatility continues to weigh on industrial decision-making. Recent adjustments on steel and aluminum imports have increased costs for manufacturers, prompting many to delay major production equipment purchases. This uncertainty is particularly challenging for capital-intensive industries like metal fabrication and heavy equipment manufacturing.
“The biggest issue with the current state of tariffs is the uncertainty they create,” said Beauregard. “Even with expected price hikes in 2026, buyers are not rushing to purchase equipment. This hesitation will likely carry over into next year across the industrial economy in Canada.”
Economic and Monetary Policy Caution
While interest rates remain a key consideration, uncertainty plays a larger role in tempering industrial investment. Many firms are closely watching monetary policy and maintaining liquidity until they gain more confidence in the broader economy. “Interest rates in Canada have begun to decline slightly, but businesses remain hesitant. From our perspective, rates are near an equilibrium level and that uncertainty, rather than rate levels, is holding back investment.”
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