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Industrial manufacturers are facing an unusual combination of confidence and uncertainty. Nearly every executive has adjusted strategy in response to disruption, yet many continue to struggle to translate those changes into measurable growth.
Findings from the EY-Parthenon 2026 Growth Survey suggest that competitive advantage will increasingly come not from identifying growth opportunities but from building adaptive operating models that can continuously convert AI, partnerships, pricing and innovation into business outcomes.
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Read more1. How are industrial manufacturers adapting their growth strategies?
The survey shows that industrial manufacturers remain growth-oriented despite a volatile and unpredictable market environment. They are not simply defending margins or waiting for stability to return. Many are actively rewriting strategies, setting objectives for new initiatives and looking for levers that can help them adapt faster than competitors.
But the industrial growth playbook — which now spans AI, pricing, corporate venture building, partnerships, supply chain redesign and service-based business models — looks different from the cross-sector average. Manufacturers are less likely to rely on product and market development than respondents overall, with 34% citing it as a growth lever in the past 12 months compared with 53% across industries. Instead, they are leaning more heavily into strategic AI, partnerships and alliances, supply chain optimization, market penetration and product or service innovation.
The prominence of partnerships and alliances also suggests that manufacturers increasingly recognize they cannot build every growth capability internally. As technology cycles accelerate and business models evolve, ecosystems can provide faster access to capabilities, markets and innovation than organic development alone.
Key takeaway: Volatility is no longer a temporary disruption. Industrial leaders who treat strategy as a living document, not an annual exercise, will out-adapt peers who are still optimizing for stability that isn’t coming back.
Growth levers organizations used in the past 12 months
2. Which growth levers are moving the P&L?
Corporate venture building and price optimization stand out as the growth levers most often associated with disproportionate profit and loss (P&L) impact. Manufacturers appear to be looking beyond traditional scale plays toward new business models, sharper commercial decisions and faster ways to test emerging opportunities.
In an environment shaped by tariff exposure, input-cost volatility, supply chain redesign and shifting customer expectations, pricing is becoming a growth capability. Manufacturers that can connect cost, demand, customer value and channel insight can protect margin while identifying where customers are willing to pay for differentiated performance, reliability or service.
Key takeaway: The most promising levers are not isolated initiatives. Venture building, pricing and partnerships require manufacturers to coordinate strategy, capital allocation, data, operations and commercial execution.
3. Why is AI adoption not yet translating into full growth impact?
AI is central to the industrial growth agenda, but the survey points to a trust-and-impact gap. About 88% of companies are either piloting or fully executing AI for growth strategy and decision-making, yet many applications remain concentrated in efficiency and productivity rather than growth-shaping decisions.
Industrial leaders are also more cautious than peers. While 78% of respondents across industries see AI as a positive factor for growth, only 71% of industrial manufacturing leaders say the same and 24% see AI as creating downside risk, compared with 16% overall. Manufacturers are also less likely to be fully executing AI to improve customer service or interaction: 38% of industrial manufacturing respondents vs. 51% of respondents in the total sample.
The opportunity is not simply to automate tasks. Manufacturers can use AI to improve engineering productivity, reduce downtime, strengthen demand sensing, personalize service, optimize pricing and unlock new value from connected products. The challenge is moving from operational efficiency gains to growth-shaping decisions.
Key takeaway: Manufacturers appear to be using AI as an enabler of operational and commercial resilience. The challenge is that operational improvements alone rarely translate directly into revenue growth unless paired with changes to pricing, customer engagement, service models and capital allocation.
4. What explains the gap between confidence and execution?
The most interesting finding may be the industrial manufacturing paradox. Leaders are confident, active and disciplined. Ninety-six percent say they can focus on the most critical growth initiatives and roughly 90% regularly define intended outcomes. Fifty-three percent strongly agree that their organizations know how to leverage data and AI to enable growth. Yet only 54% say more than half of their initiatives achieved expected results.
Taken together, these findings point to a potential explanation that manufacturers are stronger at optimizing operations than transforming operating models. Skills gaps, risk and compliance concerns, outdated technology and infrastructure, decision paralysis, lack of agility, siloed data and budget constraints make it harder to scale new growth initiatives across the enterprise.
Key takeaway: Manufacturers are discovering that operational excellence does not automatically translate into growth excellence. Their challenge is converting ideas, technology and partnerships into measurable business outcomes.
5. What should industrial manufacturers do next?
Manufacturing leaders can build on their ability to adapt to carry out transformations for growth decision-making and execution, especially in five key areas:
Key takeaway: The manufacturers that stand to grow fastest will be those that build adaptive operating models that combine AI, pricing, partnerships and innovation into a single growth system rather than managing them as separate initiatives.
For industrial manufacturers, the next growth frontier is not simply to do today’s work more efficiently; it is about using strategy, technology and external partnerships to create new sources of revenue and margin growth. Those who connect operational discipline with faster decision-making will be better positioned to out-adapt uncertainty and convert disruption into lasting advantage. Learn more about what growth leaders are saying in the report Growth strategy under pressure: Can AI unlock what’s next?
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