Manufacturing Industry Outlook 2024: Five Impactful Trends

Although we are out of the vise grip of the COVID-19 pandemic, manufacturers continue to face immense challenges, notably labor shortages, regulatory shifts, trade disputes, supply chain complexity, etc.  To help address these challenges, industrial and manufacturing companies are investing in digital transformation. Digital transformation is in full swing in numerous manufacturing sectors, including semiconductor, automotive, mining, pulp and paper, cement, metalworking and machine tools, and many more industries. ABI Research covers the latest technology trends that will determine the fate of manufacturers’ digitalization journey.

In its latest market forecast, ABI Research reports that the worldwide Manufacturing Value Added (MVA) in 2022 surpassed US$16 trillion, slightly less than the 20% growth we saw between 2020 and 2021. More than half of global manufacturing value originates in the “Big 4” manufacturing nations: China, the United States, Japan, and Germany. Together, these four countries account for 57% of MVA worldwide. It should be noted that the Asia-Pacific region makes up 45% of the global manufacturing market alone in 2022, growing at the fastest rate (CAGR of 4.5%). While Chinese manufacturers account for 68% of MVA in the region, it's interesting to see the rapid growth in Vietnam, which employs more manufacturing employees than Malaysia, the Philippines, Singapore, and South Korea combined. Moreover, Vietnamese manufacturers have doubled their revenue between 2015 and 2022 (learn more in the Analyst Insight Global Manufacturing Data: Who Are the Asia-Pacific Star Nations and How Can Technology Vendors Capitalize?)

Energy, mining, and automotive companies dominate the manufacturing industry, accounting for all the top 10 largest manufacturers by revenue in 2023. Mining and crude oil company Saudi Aramco was the largest manufacturer in 2023, generating US$603.7 billion in annual sales and more than US$159 billion in profits. All 10 companies—and their financial positioning—are identified in Table 1.

Table 1: Top 10 Largest Manufacturers In 2023


Revenue (US$ Millions)

Profits (US$ Millions)

Assets (US$ Millions)

Number of Employees


Saudi Aramco





Mining & Crude Oil Production

China National Petroleum





Petroleum Refining

Sinopec Group





Petroleum Refining






Petroleum Refining






Petroleum Refining






Motor Vehicles and Parts

Toyota Motor





Motor Vehicles and Parts






Petroleum Refining






Mining & Crude Oil Production

British Petroleum (BP)





Petroleum Refining

(Source: ABI Research)

Another curious observation our analysts note is the emergence of semiconductor factories rivaling automotive players in terms of factory size. While automakers continue to consistently possess the largest factories, semiconductor plant construction projects in the United States are changing the narrative. TSMC’s 17.1 million square foot (5.2 million square meters) in Phoenix, Arizona, and Samsung’s 16.4 million square foot (5 million square meters) chipset factory in Taylor, Texas, give automakers a run for their money. These two semiconductor production facilities land on the list of the top five largest factories in the world.

The rest of this article will report on the following trends that provide an outlook of the manufacturing industry in 2024:

  1. An increasingly complex operating environment
  2. Many manufacturers are not ready for generative Artificial Intelligence (AI)
  3. Increased adoption of Software-as-a-Service (SaaS)-based Computer-Aided Design (CAD) solutions
  4. Industrial metaverse deployments to ramp up, but remain small-scale
  5. AI-based Quality Management System (QMS) software still in its early days

1. An Increasingly Complex Operating Environment

Last year, “friend shoring” became a trendy buzzword in the manufacturing industry, used to indicate that companies will move their facilities/plants to more friendly countries. Friend shoring is just a fancy way of saying re-shoring, emphasizing the geopolitical tensions brewing between certain countries (e.g., China and the United States).

While manufacturers want to re-shore production, this isn’t a simple task. In many cases, notably in chip manufacturing, Western nations lack the local expertise required for production. For example, TSMC is considering hiring workers from Taiwan to accelerate the time it will take for new Arizona chip facilities to become operational. This supply chain complexity highlights the sometimes contradictory priorities that manufacturers currently possess. On one hand, they want to avoid volatile regions that could disrupt production in the future. On the other hand, manufacturers often lack the skills, experience, and technical means to bring production closer to home.

Another complexity facing manufacturers in 2024 includes the need to invest in companies that produce key materials and components. This stems from industrial and manufacturing companies’ supply chains being exposed during the recent semiconductor shortage. By putting a stake in or acquiring these material/component producers, manufacturers can build a shield around their supply chain if availability becomes low. Automakers are a notable example, with some buying stakes in companies that produce the materials and resources that facilitate the transition from Internal Combustion Engines (ICEs) to Electric Vehicles (EVs).

Environmental, Social, and Governance (ESG) is another key consideration for manufacturers this year as mandatory ESG reporting ramps up. This means materials must be ethically sourced, operations are safe for workers, and operations do not negatively impact local environments. Manufacturers will need to invest in technologies that build a digital thread, allowing them to assess ESG criteria from design through the product's end-of-life.

2. Many Manufacturers Are Not Ready for Generative AI

Increasing borrowing costs, along with increased costs of raw materials and components, make digital transformation a rocky journey for industrial and manufacturing firms. These companies seek technology solutions that provide quick results, but this isn’t usually feasible. Generative AI, for example, is the technology of the decade, but requires a transformative internal change. Everything from a shift in corporate culture to employee upskilling is required before generative AI will bear fruit.

Many business leaders in the manufacturing sector lack the patience to wait around for a technology to provide benefits. Additionally, most manufacturers and industrial operators are not financially ready to allocate the budget and resources needed to train their employees on generative AI. Many executives picture mundane tasks disappearing once AI is implemented. However, the transformation will still necessitate mundane tasks like data management. Again, this idea of a gradual transition to AI-based automation is unappealing to many manufacturers that want immediate results.

While a business case for generative AI in manufacturing has been established, and some will adopt it soon, many companies will lose their ambition for adopting the technology in 2024. Therefore, it will be some time before the ubiquitous adoption of generative AI across manufacturing verticals occurs.

3. Increased Adoption of SaaS-Based CAD Solutions

The year 2024 will see Software-as-a-Service (SaaS)-based Computer-Aided Design (CAD) solutions dip into the sales made from traditional on-premises solutions. The SaaS deployment model allows manufacturers to keep their CAD software on a browser and in the cloud. Our analysts forecast that cloud-enabled features will play a prominent role this year in supporting features such as the following:

  • Collaborative work
  • Generative design enhancements through High Performance Computing (HPC)
  • Integration of Virtual Reality (VR) as a functional design tool

New SaaS-based CAD software solutions like CREO+ and Zel X join a market already led by established offerings such as Fusion 360, NX X, Onshape, and 3DEXPERIENCE CATIA. ABI Research forecasts revenue from SaaS deployments of CAD to grow at more than twice the rate of on-premises solutions through the next decade.


4. Industrial Metaverse Deployments to Ramp Up, but Remain Small-Scale

Another trend shaping the manufacturing industry in 2024 is the increased uptake in the industrial metaverse. The hype was helped at Hannover Messe 2023, where Siemens showed the manufacturing world what’s possible with the full-fledged metaverse. The company presented a video demo of a digital twin of advanced battery producer FREYR’s facility. With this solution, FREYR possessed a virtual replica of its gigafactory, which mapped out all facility components (machinery, safety data, robotics, etc.). This demonstration generated tons of momentum for the industrial metaverse, and there is widespread buy-in among manufacturers.

As much as the manufacturing industry is excited about the industrial metaverse, factory-wide deployments are still unrealistic for most companies. Large-scale metaverse deployments have significant upfront costs, and proving value can take a long time. Instead, our analysts expect 2024 to see small metaverse projects confined to certain operational areas.

The industrial metaverse's low-hanging fruit use cases expected this year include employee training, collaboration, production planning, and remote expert assistance. These small-scale projects are less expensive and can yield quicker results. Once the business case is established, manufacturers can scale their metaverse deployments as needed.

Related Content

Metaverse Driven Spending in Manufacturing (Chart)

Industrial Metaverse: Use Cases, Deployments and Case Studies (Presentation)

5. AI-Based QMS Software Still in Its Early Days

Quality assurance is one of the most important aspects of manufacturing, ensuring that damaged or defective products do not ship out to customers. In this context, Quality Management System (QMS) software is a key solution for manufacturers as it electronically documents and manages quality processes, helping detect issues before defects occur. AI, like in other aspects of manufacturing, is a buzzy topic holding immense potential for QMS software. However, ABI Research believes that the fusion of AI into QMS software will be a nascent opportunity in 2024, as manufacturers have little desire to give up control of processes to AI. This trend is similar to supply chain operators that do not want Supply Chain Control Towers (SCCTs) to fully automate key decision-making processes via AI.

This year, QMS software providers will certainly begin announcing AI functionality in their solutions at preeminent trade shows and company events. However, these deployments will likely cater to manufacturers’ lighthouse facilities and not be deployed company-wide. For the time being, QMS software vendors are still in the educational phase, speaking with customers to understand how the addition of AI can address plant floor challenges.

These manufacturing trends were a part of ABI Research’s 82 Technology Trends That Will—And Will Not—Shape 2024 whitepaper. To identify 77 more technology trends, download the paper today!

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