2026 State of Manufacturing in Iowa

Manufacturing is growing more complex every year. To help Iowa manufacturers and the partners who support them navigate what’s ahead, CIRAS presents the 2026 State of Manufacturing in Iowa report.

We combine state-wide economic data with surveys from more than 200 Iowa manufacturing leaders conducted in January 2026. The results in this report primarily represent small- to medium-sized manufacturers, who make up 97% of manufacturers and 59% of manufacturing employment.

Manufacturing Is Strong, with Real Challenges Surfacing

Manufacturing is the backbone of Iowa’s economy. It’s the largest contributor to GDP, with about half of all manufacturing linking to our agriculture sector and creating a competitive advantage that is difficult to replicate.

A few underlying trends are worth paying attention to:

None of these are crisis signals on their own. But together, they point to something important: What it takes to thrive in modern manufacturing is changing.

Performance Is Starting to Split

One of the clearest takeaways from this year’s survey is the growing divide in performance:

This follows a trend we have seen over the last decade, where profitability has been eroding in the bottom half of the survey respondents. Compounding this challenge are the increased cost of capital and inflation. Small- to mid-sized manufacturers form the backbone of Iowa’s economy, and driving improved profitability is needed for the health of Iowa’s economy.  

Interconnected Challenges

When we asked manufacturers what will limit their growth over the next five years, three themes rose to the top:

Individually, each of these is manageable. Together, they create a level of complexity that’s very hard to navigate. Decisions in one area ripple into the others. Workforce constraints impact productivity. Cost pressures limit investment. Trade shifts affect both.

Iowa manufacturers aren’t struggling due to lack of action. They are struggling because complex interconnected problems are difficult to solve, especially in a volatile and rapidly changing industry.

Companies Acting Without Achieving Scale

Across technology, workforce, and management initiatives, companies are implementing change. In most cases, results are meeting or exceeding expectations.

Technology remains one of the clearest opportunities and one of the biggest gaps. Foundational tools like cloud computing, cybersecurity, and 3D CAD are widely adopted. Robotics, data analytics, and IoT are showing strong value but are not growing market penetration or progressing in maturity within businesses.

The performance gap is not whether manufacturers have implemented change, but more likely is driven by the scale and effectiveness of that change.

The challenge isn’t identifying good ideas; it’s scaling and sustaining them across the business. The result is pockets of progress instead of bottom-line impact.

What This Means for Leaders

Our survey and the economic data reflect the reality of leading in modern manufacturing: the traditional daily pressures are compounded by complexity and uncertainty, making sustained profits elusive for many.

Bold visions are needed. Incremental results aren’t enough, and leaders need to drive a culture where incremental change can scale for big outcomes. How would our business need to look different to improve productivity by 25%?

Scaling requires systems thinking. Leaders need to design flexible systems where investments in people, processes, and technology reinforce each other and drive sustained performance improvement. Rethink project success in terms of your bold vision: If we scaled it across the full business, would we improve productivity by 25%?

Fundamentals matter more than ever. Whether it is a new customer segment, a new product, or a new technology, change doesn’t scale without everything else working right. People, processes, and technology all need to step through change together for scale to work. Do our people have the clarity, capability, and reinforcement to make this stick?

Contact Michael O’Donnell to learn more about the 2026 State of Manufacturing in Iowa report.