2025 Advanced Manufacturing Outlook Report dives into Industry 4.0’s adoption, continuing roadblocks

The 2025 Advanced Manufacturing Outlook Report is now available for download.

As the Canadian economy battled through 2024, the manufacturing sector found itself influenced by both economic pressures and new business opportunities. Early in the year, geopolitical uncertainties and a high interest rate limited growth prospects, with many manufacturers scaling back expenses and capital investments amid fears of a potential recession.

At the same time, persistent supply chain disruptions continued to plague the industry, particularly affecting sea freight and critical maritime routes, leading to rising input costs that manufacturers struggled to absorb. Compounding these operational hurdles was a growing labour shortage, making it difficult for manufacturers to fill skilled trades positions, further straining their ability to meet production demands.

However, certain areas of investment continue to look promising. Plant and Canadian Manufacturing’s 2025 Advanced Manufacturing Outlook survey found that many manufacturers increased their investments in automation, robotics, artificial intelligence and the Industrial Internet of Things (IIoT), striving to enhance efficiency and transition towards “smart factories” and Industry 4.0 practices. Of the 203 respondents—manufacturing executives, owners and leaders—89 per cent reported experiencing a benefit from technological upgrades. There’s also been a noticeable decline in those who say that are not currently applying IIoT: -14 per cent compared to 2024, to be precise.

This duality of economic struggle and the need for innovation creates an opportunity for a more in-depth look at how these elements have influenced Canada’s manufacturing landscape over the past year. The Advanced Manufacturing Outlook survey focused on Industry 4.0 technology adoption, how it’s used, its perceived limitations and some of the aforementioned challenges that advanced manufacturing technologies are trying to help mitigate.

The research for the report was led by Bramm Research Inc. in Oakville, Ont., and conducted during late-May to mid-July. The research was in partnership with sponsors MNP and FedEx, as well as EMC and Alps Welding Ltd.

Key Takeaways:

The survey results reveal a steady engagement with advanced IIoT capabilities, with a quarter of respondents currently applying these technologies (the same level as the previous year). Investment intentions ticked upwards, with 18 per cent planning to invest in IIoT technologies over the next year, up from 10 per cent last year. However, a consistent 20 per cent of respondents remain unfamiliar with IIoT capabilities.

Among those utilizing IIoT, a significant 82 per cent are focused on enhancing efficiency and productivity. Key applications include tracking materials and assets (60 per cent), improving visibility from the manufacturing floor to business management (62 per cent) and gaining insight into production processes (68 per cent). Additionally, the adoption of IIoT for developing smart products has increased, with 67 per cent of respondents reporting involvement in this area—an increase of 14 per cent since last year.

The benefits of technology upgrades are evident, with 89 per cent of respondents noting positive outcomes. Specifically, 47 per cent reported increased product quality, a rise from 29 per cent in 2024, and 43 per cent experienced greater throughput compared to 32 per cent last year. While reductions in downtime and operational costs remain stable, there has been a noticeable improvement in staff efficiency, with 29 per cent reporting reduced staffing needs versus 19 per cent previously.

Looking to the future, 81 per cent of respondents anticipate that AI will positively impact various processes, including production, supply chain efficiency, and sales automation. When it comes to spending, investments in robotics and automation, as well as ERP systems, dominate the landscape. Those actively using IIoT have invested an average of $91,100, significantly higher than the overall average of $40,500.

The report also highlighted several key challenges and among manufacturers familiar with IIoT. The most significant obstacle to developing and implementing technology strategies remains funding challenges, with 51 per cent of respondents citing this issue, an increase from 35 per cent in 2024.

The report also dives into the ongoing cybersecurity challenges facing manufacturers, and how threats have continued to evolve despite a contingent of survey respondents feeling like they’ve now done enough to protect themselves.

To read the rest of the results as well as expert insights, download the Advanced Manufacturing Outlook report here.