{"id":129658,"date":"2026-08-04T23:03:12","date_gmt":"2026-08-04T23:03:12","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/129658\/"},"modified":"2026-08-04T23:03:12","modified_gmt":"2026-08-04T23:03:12","slug":"manufacturing-sector-benefits-from-ai-buildout","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/129658\/","title":{"rendered":"Manufacturing sector benefits from AI buildout"},"content":{"rendered":"

Orders of durable goods picked up<\/a> in June, according to new data from the Census Bureau. That comes on top of a separate report from the Institute for Supply Management<\/a>, which found that in July, the entire manufacturing sector expanded at its fastest rate in four years, thanks to a pickup in demand and production activity, backlogs, and even employment.<\/p>\n

All of this is noteworthy, given that manufacturers are still facing a number of headwinds \u2014 including higher energy costs, elevated interest rates, tariffs, and an uncertain economy. The manufacturing sector\u2019s been picking up, in part, because manufacturers are building out their capacity.<\/p>\n

Last year\u2019s tax law helped many businesses upgrade, \u201cwhether it\u2019s property, plant, and equipment, whether it\u2019s investing in a new segment of the business,\u201d said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments.<\/p>\n

The manufacturing sector\u2019s also seeing plenty of demand, Miskin said \u2014 especially from other businesses. \u201cAnd what is the big business expense of 2026<\/a>? It\u2019s this little-heard-of-thing called AI<\/a>.\u201d<\/p>\n

Miskin said data center development<\/a> is creating demand for computers and other electronics. It\u2019s also creating demand for industrial equipment, per Bernard Yaros, lead U.S. economist with Oxford Economics.<\/p>\n

\u201cYou\u2019re seeing a lot of demand for engines, turbines, and power transmission equipment, because the AI buildout \u2014 a key component of that is ultimately the necessary upgrades to the power grid<\/a>,\u201d he said.<\/p>\n

But it\u2019s not just AI, Yaros added. The Institute for Supply Management found that inventory levels right now are low for transportation equipment, food and beverages, chemicals, plastic and rubber products. That means all kinds of businesses are gonna have to restock.<\/p>\n

\u201cAnd that\u2019s also going to be a broad tailwind to manufacturing, as businesses need to replenish their inventories of goods,\u201d Yaros said.<\/p>\n

Businesses also might want to restock because they\u2019re worried about the president\u2019s new round of import taxes<\/a>. But many manufacturers have gotten used to tariffs by now<\/a>, noted Scott Paul, president of the Alliance for American Manufacturing.<\/p>\n

\u201cInstead of either delaying some of these capital expenses or purchases, or hoping that there would be a different outcome, there\u2019s this realization that this is the new normal, but we can operate successfully with this,\u201d Paul said.<\/p>\n

Higher tariffs could cause the manufacturing sector to slow down, he added. The same is true with an escalation in the Middle East or higher interest rates. But for now, Paul said the sector\u2019s proving to be resilient.<\/p>\n

Related Topics<\/p>\n","protected":false},"excerpt":{"rendered":"Orders of durable goods picked up in June, according to new data from the Census Bureau. That comes…\n","protected":false},"author":2,"featured_media":129659,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,25,39,64917,64916,1817,21591],"class_list":["post-129658","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-artificial-intelligence","tag-data-centers","tag-durable-goods","tag-industrial-growth","tag-manufacturing","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/129658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=129658"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/129658\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/129659"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=129658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=129658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=129658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}