Several developing trends will define the long- and short-term future of the non-road equipment manufacturing industry.
To navigate challenges and seize newfound opportunities in the new year, equipment manufacturers must understand what trends are on the horizon, and how they may evolve over time, evaluating their potential impact on the industry and the customers that they serve.
Keeping that in mind, let’s take a look at the five key trends that AEM subject matter experts say are positioned to impact equipment manufacturers in 2026:
Farmers will maintain the status quo while managing costs and improving margins.
Austin Gellings, AEM Senior Director of Agricultural Services
After years of volatile commodity prices, input costs, and supply chain disruptions, many farmers are entering 2026 with a cautious mindset. Rather than making large-scale investments in new equipment, the prevailing trend is to maintain the status quo with cautious optimism as the year progresses, as farmers focus on cost control and incremental improvements. This approach reflects a desire to preserve capital while finding ways to enhance operational efficiency and profitability. Manufacturers must continue to adapt to the trend of farmers prioritizing operational resilience over rapid expansion, which will continue to influence purchasing decisions and service expectations.
One key strategy farmers are using to improve their margins is leveraging data for operational insights. Precision agriculture tools, including machine and field level data, are enabling farmers to make smarter decisions about fuel usage, maintenance schedules, and input application. These insights help farmers do more with what they already have and maximize the return on their operational inputs. For manufacturers, this means that software solutions, connectivity, and data integration will play an increasingly important role in customer relationships.
Another agricultural area gaining traction is retrofitting older equipment with modern technology. Farmers are looking for cost-effective ways to upgrade capabilities, such as adding GPS guidance, variable-rate technology, or aftermarket sensors to existing machines. This trend creates opportunities for manufacturers to develop retrofit kits, modular upgrades, and service programs that extend the life and functionality of equipment. Companies that can support farmers in this “optimize rather than replace” mindset will strengthen loyalty and position themselves for future growth when market conditions improve.
Data insights will continue to shape the construction sector.
Dormie Weber, AEM Construction Services Manager
Availability of additional mixed fleet data is transforming construction operations and providing insights for jobsite productivity, a trend that is shaping the industry today. Construction is moving beyond traditional telematics, sensors, and devices that provide basic machine health and location information. Today, the shift is toward embedding connectivity directly into the machine’s operating system. It transforms machines from lone workhorses into hardwired players in a living, data-driven network, driving productivity, real-time decision making, and uptime like never before.
For operators and fleet managers, it means better user experiences, intuitive dashboards, automated alerts, and workflows that reduce downtime and improve safety. For companies, it drives measurable gains in productivity and cost control. Over time, these capabilities will (and have) evolved toward semi-autonomous and fully autonomous operations, reshaping workforce roles and competitive dynamics across the industry. Companies that embrace this shift early will not only optimize current operations but also position themselves for a future where data-driven decision-making is the norm.
Beyond operational benefits, this trend also sets the stage for new business models. As some OEMs and technology providers push toward “equipment-as-a-service,” interoperability becomes the linchpin. Systems must speak the same language across mixed fleets, assets, and platforms to unlock the full potential. Data is no longer just numbers on a spreadsheet. It is a strategic asset, fueling insights to help contractors better prepare. As we move into 2026 and beyond, deeper integration and more seamless collaboration between hardware and software ecosystems will continue.
The human-machine handoff will continue to have a transformative impact on the workforce of today.
Julie Davis, AEM Senior Vice President of People Strategy
Manufacturing’s defining workforce priority next year is the human-machine handoff. Skilled labor gaps aren’t going away, and automation and AI are moving from pilots to daily operations. The opportunity is clear: use AI to relieve persistent shortages and increase throughput and quality. The constraint is equally clear: value depends on human capability.
Across the industry, leaders expect AI to drive margins, yet most are still building data foundations, safety frameworks, and the skills to run digitally accelerated lines. That puts CHRO–CIO collaboration front and center, along with knowledge transfer from experienced employees, flexible pathways for Gen Z and midcareer talent, and expanded participation by older workers. In short, the winners will treat workforce and technology as one strategy – not separate streams.
2026 will be the year of upskilling with intent. As robotics and generative AI become standard on the shop floor, human roles are evolving toward oversight, troubleshooting, and data-driven decision-making.
Companies that prioritize digital literacy and technical training will retain talent and foster adaptability, ensuring employees can collaborate with machines rather than be displaced by them. Think about “training hotspots” adjacent to the line, outcome-based reskilling tied to real metrics, and skills-based hiring that opens doors beyond traditional credentials.
It is becoming increasingly important for organizations to codify knowledge transfer from tenured technicians and supervisors into digital SOPs and coaching, so the wisdom that keeps plants running isn’t lost. AI without upskilling stalls, and upskilling without AI won’t catch up.
Finally, demographic shifts are reshaping workforce planning. An aging workforce and declining interest in traditional manufacturing careers among younger generations are intensifying talent shortages. At the same time, reshoring initiatives and regionalized supply chains are creating demand for localized skills. These dynamics underscore the need for proactive succession planning, targeted recruitment, and partnerships with educational institutions to attract and prepare the next generation of manufacturing talent.
Surface transportation reauthorization will remain front of mind for equipment manufacturers.
Kate Fox Wood, AEM Vice President of Federal Affairs
As Congress turns its attention to the 2026 surface transportation reauthorization, the stakes for America’s equipment manufacturers could not be higher. Current programs expire in September, and the House Transportation and Infrastructure Committee is eyeing a February markup with floor action in March. The Senate Environment and Public Works Committee is expected to follow soon after. But if history is any guide – remember the 2018 Farm Bill, which saw its deadline extended three times – the odds of a delay are strong. In Washington, predicting timelines is a fool’s errand; even Ms. Cleo couldn’t forecast the year we’re about to have.
This legislation represents more than a renewal of existing programs—it’s a chance to stabilize and grow an industry that powers America’s infrastructure. The Infrastructure Investment and Jobs Act (IIJA) of 2021 set a historic precedent with its sweeping scope and unprecedented spending levels. Now, Transportation and Infrastructure Chair Rep. Sam Graves is signaling a return to a more traditional bill, but with robust funding. Rumors swirl that President Trump wants to go even bigger, which could unlock significant market opportunities for manufacturers. Yet navigating that price tag through a narrowly divided House will be no small feat. Budget hawks are already sharpening their knives, and some Republicans remain skeptical after branding the IIJA as wasteful. At the same time, Congress must confront the long-term solvency of the Highway Trust Fund. Momentum is building to replace the diminishingly effective federal gas tax with a vehicle registration fee, but that transition is far from complete – there’s still significant legwork ahead to design, implement, and secure bipartisan support for a sustainable funding model.
Beyond the headline numbers, policy details in this bill will shape the future of equipment manufacturing. Buy America provisions will influence procurement practices, while continued federal support for digital construction technologies promises to accelerate innovation on job sites. And yes, right-to-repair remains a hot-button issue that could hitch a ride to this legislative vehicle, with implications for aftermarket service and dealer relationships. These decisions will ripple across the industry, determining whether manufacturers can seize new opportunities or face regulatory headwinds. For those of us watching closely, one thing is clear: this reauthorization isn’t just about roads and bridges – it’s about the competitiveness of American manufacturing for decades to come.
Regulatory pullback will continue in response to industry pressures and political concerns.
AEM’s Jason Malcore, Senior Director of Safety & Product Leadership
Global political concerns are driving policymakers to consider drastic methods to lower costs and relieve their voter’s economic insecurities. These policies are taking many forms, including trade deals, tariffs, incentive programs, tax cuts, and regulatory relief. The United States and Europe, in particular, are both actively pursuing regulatory pullbacks, albeit in different domains and using distinct approaches.
In the United States, the Trump administration is working to pull back on numerous recent rulemakings, especially at the Environmental Protection Agency (EPA). The EPA is targeting dozens of different rules, from their ongoing reassessment of the 2009 Endangerment Finding for Greenhouse gases (GHG), eliminating PFAS reporting requirements for imported articles, eliminating large swaths of its GHG Reporting Program, and reexamining their approach to chemical risk evaluations under the Toxic Substance Control Act (TSCA). These efforts are attempting to undo many of the changes made during the last couple of presidential administrations, with an eye on reducing regulatory burdens on key industries. Meanwhile in Europe, Brussels is pursuing a deregulatory agenda as well. The EU Commission has advanced several “omnibus” simplification packages to scale back various environmental and sustainability rules promulgated recently. For instance, the EU Commission is raising thresholds on the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), reducing covered firms by over 80% and limiting due diligence to direct suppliers. The Commission has also moved to simplify some of the requirements of its Carbon Border Adjustment Mechanism (CBAM), as well as moving to scrap large swaths of their SCIP Database reporting requirements.
In both regions, the shift reflects a broader recalibration: the U.S. prioritizing the reduction of economic burdens via environmental and labor deregulation, while Europe is looking to enhance its global competitiveness by easing sustainability reporting and digital compliance, each country responding to pressures from industry and domestic political concerns.
