Welcome to the Industrial Executive!

I’m super glad you’re here.

Let’s get to it!

The December ISM Manufacturing PMI came in at 47.9.

For those keeping score at home, that's the lowest we've seen since October 2024.

New orders are soft, input costs keep climbing thanks to tariffs pushing the average rate to nearly 17%, and we just logged our 11th consecutive month of declining factory employment.

Despite the ugly numbers, the 2026 outlook isn't all doom and gloom.

Bloomberg is suggesting the recovery could finally spread beyond AI data centers and aerospace.

Deloitte and others are pointing to continued reshoring investments, AI adoption, and workforce development as potential tailwinds.

The semiconductor plays remain strong, driven by insatiable demand for chips and data center builds.

My take:

The tariff uncertainty isn't going away.

Neither are the input cost pressures.

But for those of you planning capital projects this year, the question isn't whether recovery is coming. It's whether your operation is positioned to capture it when it does.

Everyone's buzzing about the "industrial metaverse" and predictive maintenance.

Here's the reality from the plant floor.

Last month I talked with a VP of Ops running 6 facilities. His team spent 18 months building out a predictive maintenance pilot. AI agents monitoring spindle wear, vibration anomalies, temperature drift. The works.

Results?

They caught a bearing failure 72 hours early. Prevented about $340K in unplanned downtime on a single line.

The digital twin infrastructure, the real-time sensor feeds. That's all increasingly commoditized.

The hard part is getting maintenance techs to trust alerts over their gut. Integrating the new system with a 15-year-old MES that nobody fully understood. Convincing finance that "prevented downtime" counts as ROI.

This market is projected to grow from $7B to $35B by 2030.

That's a 5x jump.

But most of that growth will come from companies who figure out the people and process side first.

The ones who treat "low-code fixes for shop floor systems" as a change management challenge, not just a technical deployment.

Digital twins are cool. But a digital twin of a dysfunctional process just gives you a 3D rendering of your problems.

Before you chase the metaverse, answer this: Can your MES and ERP actually talk to each other today?

If not, start there.

The following is a paid ad:

This edition is brought to you by Axiom Manufacturing Systems. Digital transformation and process improvement shouldn't take years or cost millions… it should solve real problems starting next month.

Axiom Manufacturing Systems brings smart manufacturing to small and mid-market companies who need results, not PowerPoints.

Book your free call today

And that’s all folks!

Till next week,

The Industrial Executive