Global Manufacturing Rebound Predicted in 2025

Although the global manufacturing economy is on track for “sluggish” growth of just a 0.6% annual expansion in 2024, that picture is forecasted to brighten considerably in 2025, according to a report from the industrial automation research firm Interact Analysis.

Manufacturing output is expected to recover in 2025 and maintain a steady rate through to 2028, despite seeing a slight dip in the growth rate in 2026, the firm said.

While most territories see optimistic signs of future growth, the global measure of manufacturing production could be hindered by a stuttering economy in China. The report includes a slight downward revision for China compared with the previous edition from 2.8% to 2.4%. China as “the factory of the world” is responsible for almost half of the total manufacturing market value, so any further reductions in the country’s forecast could well lead to a small contraction in the global MIO figure for 2024.

In the meantime, all four major European manufacturing economies are currently in a downward cycle, and sentiment for the year remains gloomy. But that trend may be flipped by positive signals from the U.S., which may well start to manifest in other regions later in the year, Interact Analysis said. That’s because consumer resilience—coupled with the slow fall of inflation and interest rates—is pushing up spending worldwide, and the U.S. manufacturing economy in particular is strengthening.

The semiconductor industry has also bounced back from a low point in 2023, boosting outlook for parts of South-Asia heavily reliant on the market sector, including Taiwan, Singapore, and South Korea. Dwindling order books and the impact of the higher cost of living have constrained global demand, but there are signs of recovery in consumer spending and post-Covid supply chain problems have eased considerably.

“The global outlook for manufacturing output is mixed to say the least,” Adrian Lloyd, CEO at Interact Analysis, said in a release. “Our projections are holding but there are no clear signs of where recovery will come from and how strong it will be. As a result, we will be watching closely to see how constrained consumer spending in China, a strengthening U.S. economy, and global events will affect conditions.