Interact Analysis Forecasts Manufacturing Industry Recovery in 2025 Despite Current Challenges

by Anna

Interact Analysis, a market research firm, anticipates a challenging year for the global manufacturing industry in 2024, with the lowest point in the manufacturing cycle expected during this period. Despite the difficulties, the forecast indicates that growth will return in 2025 for many sectors.

Key regions, such as the US and Germany, are projected to experience a milder contraction in 2024 compared to the peak of the COVID-19 pandemic. Notably, the semiconductor segment is expected to have a more favorable year in 2024 following challenges in 2023.


Interact Analysis has adjusted its long-term outlook, predicting slower growth for the machinery segment over the next five years due to a weak 2023, a contraction in 2024, and concerns regarding 2025. However, the Asia-Pacific (APAC) region is expected to exhibit positive growth, with a projected Compound Annual Growth Rate (CAGR) of 2.9% between 2023 and 2028, followed by the US and Europe with CAGRs of 2.4%.


In the US, while the Federal Reserve shows no signs of cutting interest rates, a difficult 2024 is expected, with a subsequent bounce-back in 2025. The European economic outlook for 2024 is similarly challenging, with Italy, Germany, France, and the UK facing contractions in machinery production and manufacturing.


Despite the overall challenging outlook, Interact Analysis notes positive order books for semiconductor machinery, highlighting the odd position of the sector. Increased demand for semiconductor machinery contrasts with a collapse in semiconductor production. The semiconductor machinery sector in North America has seen order growth of over 50%, potentially influenced by the CHIPS and Inflation Reduction Act.


Adrian Lloyd, CEO at Interact Analysis, acknowledges the tough year ahead for the global manufacturing industry but suggests that the severity of the growth trough will be relatively mild for most regions, offering hope for a recovery in 2025.

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