A new research report shows that manufacturing leaders are broadly upbeat about the sector’s prospects and their plans to invest in added capacity, be it technological or production.

Nearly two-thirds of the respondents to a survey conducted last month by Endeavor Business Intelligence, the research division of IndustryWeek parent EndeavorB2B, said they’re either very or somewhat confident in the growth prospects of the manufacturing sector over the next five years. By contrast, only 18% were either somewhat or very concerned about the sector’s outlook.

The EBI report (which compiles responses from more than 110 executives as well as other leaders in the audiences of IndustryWeek and fellow EndeavorB2B titles Smart Industry and New Equipment Digest) also showed that manufacturing leaders are very focused on adding automation and advanced technologies to their operations. The share who said that’s their No. 1 investment priority for 2027 (36%) was nearly as much as the second and third answers, facility expansion or upgrades (22%) and workforce training and development (18%).

The expansionary ambitions of those three priorities – versus the remaining supply-chain and sustainability options that are focused more on operational refinement – surfaced clearly in EBI’s research even though nearly half of respondents said their businesses are either facing challenges or declining. They reflect the growing sense of optimism in the industrial sector evidenced by nine consecutive months of expansion readings in the ISM Manufacturing PMI and suggest that the improving mood will endure well into next year.

That’s not to say that respondents to EBI’s survey aren’t facing headaches – and familiar ones at that. Both rising costs and workforce recruitment and retention were identified by 30% of respondents as their top concerns while automation/technology adoption, the top investment priority, wasn’t far behind as a worry.

On the workforce front – which is clearly tied to the push to automate more operations – nearly 30% of respondents told EBI their organizations are not effective at attracting and retaining the next generation of talent. It’s a problem the industry has long talked about and is still working on how to address at scale. (For more on that, listen to Anna Smith’s recent podcast, “The 2026 Skilled Labor Shortage and How Manufacturers Are Bridging the Gap.”)

Still, the main takeaway from the EBI report is that, even as challenges old and new confront manufacturers, the optimism that has been building since about a year ago has gathered steam and is setting up much of the industry for a good 2027. Case in point: Recent commentary from Greg Volovic, CEO of machine-tool maker Hurco Companies, who said after his team reported third-quarter results last month that the combination of better fundamental momentum and tighter cost controls was starting to pay off in earnest.

“We know this industry is cyclical, and we are not declaring the cycle over,” Volovic said. “But we believe the direction of our business has turned, and we intend to build on it.”

To download the EBI report, click here.