2026 Economic Outlook: Positive Growth for Material Handling & Supply Chains
By John Paxton
THE ECONOMIC OUTLOOK for 2026 is positive, with moderate growth forecast for material handling equipment new orders, though there is a mix of both favorable and unfavorable risk indicators. On the positive side, interest rates are expected to continue decreasing over the coming year, which should lead to more investment. However, the pace of 2026 rate cuts will depend on how quickly inflation declines. Current data suggests inflation is hovering around 3% and remains above the Federal Reserve’s 2% target.
Even though the labor market has slowed in recent months, it remains strong, with payrolls at record highs that will continue fueling consumer demand. In addition, U.S. policy focuses on reindustrialization, foreign direct investment commitments and an increase in power demand driven by AI adoption should all provide positive economic tailwinds for 2026.
With tensions between the United States and China remaining elevated, many companies are moving their supply chains and manufacturing operations closer to home. As a result, the metals, mining, defense, industrial technology and energy sectors are all expected to expand. This trend will increase investments in material handling and supply chain equipment and services. Despite uncertainty regarding tariff policy, the foundation of the U.S. economy remains robust. Consumer demand, reshoring and reindustrialization present positive benefits for the material handling industry.
Hiring Remains Challenging
Anticipated modest job growth in 2026 is expected to drive competition for labor in various sectors, particularly for in person, physical roles. Although the record level of open jobs has declined over the past two years, there are still high levels of openings in manufacturing, construction, transportation, warehousing and utilities. This is resulting in rising wages and increased demand for skilled labor. For material handling equipment providers, escalating labor costs will further drive the move to automation and the use of AI tools to improve operational efficiency.
Top Supply Chain Trends for 2026
The new year marks a turning point where supply chains are not just reacting to disruption, they’re anticipating it. The top three trends shaping supply chains in 2026 reflect a shift toward smarter, more resilient operations.
Workforce and Talent Gap: As AI and automation scale, demand for tech-savvy supply chain professionals is surging. Leading companies are investing in talent development and reskilling and fostering workplace cultures that embrace innovation and collaboration.
Artificial Intelligence and the Demand for Real-time Data: AI is no longer a luxury – it’s a necessity. From agentic AI to predictive analytics and scenario planning, AI is now embedded across supply chain functions. Companies are leveraging generative AI for demand forecasting, supplier evaluation and real-time decision-making. These data-driven insights are improving forecasting and helping businesses deliver better customer service.
Automation and Emerging Technology: Companies are turning to automation, robotics and AI-driven insights to build efficient supply chains that are responsive and agile. These tools help operations withstand disruptions and workforce shortages while still meeting fluctuating customer demands.
Supply Chain and
Material Handling Opportunities
Jason Schenker, president of Prestige Economics and MHI’s economic partner, has identified three areas where companies can best position themselves in 2026:
- Invest in automation and AI tools to boost productivity, optimize operations and prepare to mitigate risks amid rising complexity.
- Align capital investment with U.S. industrial policy priorities.
- Stay vigilant on dynamic global trade tariff policies and the regulatory landscape.
The economic landscape for the upcoming year offers promising opportunities alongside ongoing risks. Scenario planning, paired with a proactive approach to innovative investment and alignment with U.S. industrial policy, will help companies prosper in 2026.
To discover cutting-edge solutions and see supply chains from every angle, visit MODEX 2026, held April 13–16 at Atlanta’s Georgia World Congress Center. Choose from more than 200 no-cost education sessions, learn from dynamic keynotes (including the release of the 2026 MHI Annual Industry Report) and visit more than 1,000 exhibitors showcasing the latest innovations. For more information or to register, visit MODEXshow.com. About the Author John Paxton is the CEO of MHI.
