What’s Trending: A Perspective from Valve Manufacturers

The Valve Manufacturers Association (VMA) Annual Meeting was provided a great perspective on what the future holds and how that relates to manufacturers. As expected, there was quite a bit of discussion on energy, data centers/ artificial intelligence, water, supply chains (as I spoke on “Supply Chain: Insights & Implications for Future Planning”), castings, geopolitics, trade and tariffs, talent, and other relevant topics for valve manufacturers and their extended supply chains. Since valves are required in across the board in industries ranging from oil and gas to chemical, power generation, water, food and beverage, pharmaceutical and biotech, pulp and paper, building and construction, mining and metals, to aerospace and marine, it provides a futuristic perspective to what’s trending and relevant in manufacturing circles.

What’s Trending

Overall, there are positive signs and continued increasing demand yet it is clouded with a bit of uncertainty. In fact, there are surging industries such as AI, energy and data centers, continued slower growth forecasted in industries such as water and foundries, and concerns about geopolitics, tariffs, and decreased government stimulus (related to its impact on demand). To succeed going forward, companies must build resilience, capabilities (manufacturing, supply chain, technology, talent, infrastructure), a culture of innovation, and be prepared to scale. Refer below for highlights of key themes.

Manufacturing Tax Incentives

As we discussed in our article, “Benefits of the One Big Beautiful Bill“, there are many tax incentives for manufacturers. Review the details to take advantage of the benefits. For example, it includes R&D expense capitalization, bonus depreciation of machinery, equipment, plant and other facilities, and interest expense opportunities.

Artificial Intelligence & Advanced Technologies

Artificial intelligence is a buzz. According to Harbour IQ powered by Wipfli, when comparing AI investment to non-investment, the results are clear. Profit for AI invested in AI-based equipment was 6.4% vs 4.1% if not invested. Similarly, profit was 6.8% when invested in AI-based software vs 4% if not AI-based. Technology disruption is occurring with Industry 4.0 inclusive of automation, connection, cloud computing, IoT, big data, and systems integration. For example, equipment monitoring is gaining traction. The same study found that profit was 5.2% when invested in equipment monitoring vs 3% if not invested. To gain additional insights and ideas on AI and advanced technologies, download our complimentary eBook, “How AI Powers Smart Supply Chains and Smarter Decisions“.

Data Centers

Of course, data centers are on the rise. As companies and countries try to win the artificial intelligence race, data centers are going up at a rapid pace. According to Industrial Info Resources, there are over $29 trillion in spending projects worldwide. Asia and North America dominate the spending. For example, the U.S. and Canada have over 2,600 active capex projects in the planning stages with almost $150 billion in active construction. Not surprisingly, Amazon is the top data center developer with the usual suspects in the top 10 (such as Microsoft, Google, etc.) with top states of Texas and Virginia. As with manufacturers, data center constraints include talent, power supply, supply chain disruptions and permitting and regulatory hurdles. As the needs are growing dramatically, capacity additions are also projected to scale up by almost 7 times within 3 years. As this occurs, energy consumption will rise dramatically.

Energy

Data centers, AI, manufacturing, mining, shipbuilding, and goods movement require energy. Thus, energy must scale up dramatically. This is especially true as energy assets are retired. For example, coal and natural gas assets have been retiring and are projected to retire. There have been renewable power sources such as solar and wind ramping up construction in recent years with oil and gas scaling up recently. U.S. oil production hit a peak over the summer. In addition, many experts see nuclear as the best option longer term.

Water

Water is required across the board. Not only is it needed for data centers and manufacturing, but it is also used in agriculture, mining and metals, transportation and infrastructure, pharmaceuticals and chemicals, and public services. According to Thomas Decker, a water and wastewater expert, there are approximately 77,000 utilities in the U.S. There has been significant growth since 2022, coinciding with increased public spending. In addition, there is a significant need to address infrastructure condition. In addition, data center usage alone is expected to double by 2030. Chip fabrication also adds to the water requirement needs.

Foundries

Many of our industrial manufacturing clients use castings. The U.S. has been declining for several years, and so I was highly interested in learning more about castings. At a recent Association of Supply Chain Management event, an expert who worked with castings provided hope with the leaps forward he described with the rollout of automation and advanced technologies. According to the American Foundry Society, there are 1701 foundries in the U.S. with triple the number of non-ferrous vs ferrous. Not surprisingly, most of the foundries are in the rust belt in states such as Ohio, Wisconsin, and Michigan. Aluminum far outnumbers steel, iron, copper etc. The industry has been stagnant for several years but is starting to show growth into 2029. The trends are especially interesting and similar to manufacturing overall. For example, vertical integration is gaining momentum with an emphasis on value added services. Additionally, there is expected to be continued modernization and expansion of facilities to meet the needs of reshoring and growth.

Geopolitics

Monitoring and navigating geopolitics has become an integral part of business, especially in mitigating risk and creating supply chain resiliency. Global risk remains elevated although corporate attention has declined since its peak in 2022. The hotspots to watch include the Russia/ Ukraine war, the Middle East (which has created numerous supply chain disruptions such as the Suez Canal and exposed vulnerabilities such as the exploding pagers), and U.S./ China/ Indo-Pacific. Refer to our Supply Chain Bytes video series for the latest on these hotspots and what executives should be thinking. According to the International Monetary Fund, the world economy is $115 trillion with the U.S. around $30T and China at almost $20T. Thus, tariffs have become used for geopolitical negotiation.

What’s Trending – CEO Topics

According to IoT Analytics Research 2025-Quarterly Trend Report, CEOs are most focused on robotics, data centers, and artificial intelligence. We see this with clients exploring how AI and advanced technologies can improve customer value and bottom-line results. Topics that remain important but are fading include supply chain (which we are seeing as well as global hotspots are resolved), inflation concerns, tariffs and uncertainty. We concur as tariffs are being used more of a geopolitical negotiation tool with countries and companies absorbing much of the costs, thus inflation has stayed far below expectations. Tariff effects dominate the small and fading importance category with industrial IoT, robotics, and agentic AI in the small and gaining importance category. We see these trends as clients move from concerns over disruptions to preparing to scale and focusing on increases in productivity, profitability and performance. In fact, as you roll out improvements, disruptions become less relevant and easier to overcome.

The Bottom Line

As we move from disruptions to preparing to scale for profitable growth, we must build our capabilities, capacities and customer resilience. Start by gaining a head start on your sales forecast with customer insights and end-to-end supply chain alignment. Roll out and upgrade your SIOP (Sales Inventory Operations Planning) processes to better predict demand and align with capacity and supply plans in a way that maximizes your customer value and profitability while minimizing your risk. In addition, the best clients utilize SIOP to quickly assess changing conditions and better navigate disruptions and drive money to the bottom line.

The most successful companies will be ready to scale on a dime while not carrying excessive costs. They will optimize their use of ERP, AI and advanced technologies including industrial IoT, automation, robotics, and business analytics tools. And, quite importantly, they will invest when the competition panics yet not throw good money after bad. In the next few years, there will be more companies that secure their position in the marketplace for decades to come than at any other time in history. As the global supply chain rebalances, the strongest will gain huge opportunities.

If you are interested in reading more on this topic:
Maximizing Performance and Margins with SiOP