At present, the shadow of the global recession still hangs over the manufacturing industry, and there are few clear signs of recovery in various regions. However, according to Interact Analysis’s Global Manufacturing Output Tracker (MIO), the global manufacturing sector is expected to experience a soft landing and growth recovery in 2025.

MSK060C-0600-NN-S1-UP1-NNNN Although some regional stock markets have sent positive signals, market confidence has improved, and purchasing managers’ indexes (PMI) have been slightly upgraded, the overall picture of the manufacturing sector remains subdued. As it stands, there is little solid evidence that the global manufacturing sector will achieve a full recovery in 2024, and many manufacturing economists predict that a recession is still possible.

However, although the short-term growth pressure is still very large, but the global manufacturing industry is not expected to see a significant decline in output value as in 2008 or 2020, and the long-term basis for manufacturing growth is still very stable. MSK060C-0600-NN-S1-UP1-NNNN Our forecast for the next five years also remains broadly stable: global manufacturing is expected to recover by mid-2025, and order volumes are expected to begin a gradual recovery by the end of 2024.

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Global manufacturing is expected to grow in 2025.

China is expected to underpin global manufacturing growth by 2024

In the February update to the Global Manufacturing Output Tracker, Interact Analysis CEO Adrian Lloyd described 2023 as “an unusual year full of various structural challenges, especially supply chain disruptions, but with a stronger-than-expected finish.” As for 2024, however, he also noted that growth in global manufacturing output is likely to be supported only by China’s forecast 2.4% growth (which is lower than China’s historical growth rate, MSK060C-0600-NN-S1-UP1-NNNN dragged down by the real estate sector, among others). Meanwhile, the manufacturing economies of the Americas (-1.9%) and Europe (-1.0%) are expected to contract slightly.

At present, the weak global macroeconomic situation has caused a slowdown in the manufacturing industry. The inflation problem in Europe and the United States has not been fully resolved, the cost of raw materials is rising, which in turn is pushing up interest rates, and corporate investment decisions and public consumption are becoming more cautious. At the same time, the risk appetite of lenders is also decreasing, and many enterprises have difficulties in financing, and can only destock by fulfilling backlog orders and consuming existing inventory. Current low inventory levels are expected to lead to increased manufacturing activity in the future, and we expect order volumes to improve by 2025.