Interact Analysis revised its manufacturing growth forecasts for key global regions such as the U.S. and Europe. The firm now predicts the recovery to begin in 2026 instead of 2025.
The market research company linked the delay to new tariffs imposed by U.S. President Donald Trump.
Interact Analysis’ Manufacturing Industry Output (MIO) tracker projects slower growth in the U.S. and Europe, with the U.S. forecast dropping from a possible 4% to 0.9%.
The firm downgraded its U.S. manufacturing outlook due to the sector's reliance on imports to support its largest industries.
The report expects Eurozone’s manufacturing to shrink by 2.4% in 2025 due to the vulnerability of the bigger players in the industry, which depend on the U.S. as a major export market.
In contrast, Interact Analysis anticipates Asia's manufacturing sector to grow by 2.7% overall, with China expanding by an anticipated 2.9%.
Interact Analysis
Impact on the machinery sector
U.S. reliance on imported machinery parts and components has increased the impact of new trade barriers, which is contributing to a downgrade in expected manufacturing growth.
Europe’s machinery exporters, especially Germany and Italy, are getting prepared for decreased demand from the U.S. However, Asian economies are expected to grow their machinery sectors if stable trade deals are forthcoming.
“Overall, the growth that was expected in 2025 is not achievable due to the ongoing tariffs policies but there’s hope for some stabilization in 2026," MIO Tracker Lead Analyst Jack Loughney said. "Trump’s tariffs have put a damper on what was expected to be a good year for global manufacturing and we have now downgraded a majority of our projections as a result of the rapidly changing climate and the continuing threat of a tariff war.”
