Interact Analysis
From Interact Analysis
In 2025, the global manufacturing industry is entering a channel of stabilization and recovery. Although the full-year data has not been fully released yet, statistics as of November 2025 show that the North American market demonstrates strong resilience, with the growth rate of manufacturing output slightly rising compared to 2024. The European market has bottomed out, and multiple indicators have started to improve in the second half of the year. China's manufacturing industry has shown signs of recovery.
According to the Interact Analysis global Manufacturing Industry Output (MIO) report, the growth rate of global manufacturing output is expected to increase from 1.1% in 2024 to 1.9% in 2025, among which the growth rate in China will rise from 2.1% to 2.7%.
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Outlook for 2026
Moderate growth
In 2026, the global manufacturing industry is expected to continue its recovery trend, but the overall pace of recovery is still expected to be slow, especially in the machinery and equipment industry.
We expect that the global manufacturing output value will increase by 3.1% in 2026, with China projected to grow by 3.5%. For Chinese manufacturers, export demand is expected to support growth in 2026, mainly due to the gradual stabilization of expectations in the European and American markets, which will boost demand for the global supply chain. However, the foundation for the recovery of domestic demand is still not solid, and the investment momentum remains insufficient. The growth in 2025 is partly driven by infrastructure projects and consumption subsidy policies. With the gradual withdrawal of national subsidies and other policies, whether the recovery of domestic demand in 2026 can be sustained will rely more on the strength of the market's own vitality.
The recovery of the machinery industry is slow
For the machinery industry, the road to recovery remains full of challenges. The growth rate of the global machinery industry's output value is expected to be only 0.4% in 2025, while that of China is 1.6%. The European and American markets are mainly affected by sluggish investment, the destocking cycle and the uncertainty of trade policies. The domestic market, however, is confronted with pressures such as low profit margins of manufacturing enterprises, low capacity utilization rates, and tariffs, all of which have dampened investment willingness.
In 2026, the performance of the machinery industry remains far from optimistic. By the end of 2025, the growth rate of domestic manufacturing investment will continue to slow down, and the development prospects of the machinery industry will be under pressure. The sluggishness of domestic demand and the uncertainty of the trade environment will continue to affect the performance of the manufacturing industry. It is estimated that the growth rate of the domestic machinery industry's output value will be 3.2% in 2026, lower than the 3.5% of the terminal manufacturing industry.
Price war
Challenges in Manufacturing
Price wars remain a key challenge for the global manufacturing industry, having a significant impact on both Chinese and European manufacturers. By the end of 2025, the fierce price competition has not shown any significant easing. The price sensitivity of the consumer end remains persistently high, intensifying the operational pressure on terminal manufacturers and passing on the cost pressure to the machinery and parts market.
With the advancement of domestic anti-involution policies and the implementation of capacity regulation in some industries, it is expected that the pace of price decline may slow down in 2026. However, due to the sluggish recovery of domestic demand, the overall price level is likely to remain low. Data for November 2025 shows that China's consumer price index (CPI) rose slightly by 0.7% year-on-year, while the producer price index (PPI) for industrial producers dropped by 2.2% year-on-year. Since October 2022, the PPI has remained in a negative growth range.
The performance differences among domestic industries
Strong and weak industries
By industry, some sectors will show a strong recovery and growth trend in 2025. According to the MIO report, the output value of the transportation equipment industry is expected to grow by 13.1%, mainly driven by the shipbuilding industry. Non-road vehicles have also seen a significant rebound after a decline in the previous two years, mainly due to the support of infrastructure projects in the first half of the year and the recovery of the global mining industry in the fourth quarter. The growth rate of this industry is expected to reach 8.5%. Meanwhile, the output value of semiconductors and components has also grown rapidly, with an expected growth rate of 7.5%. The above-mentioned industries are expected to continue leading manufacturing growth in 2026, although their high growth rate in 2025 May gradually stabilize.
However, some traditional industries will still face considerable pressure in 2025. Among them, the output value of the non-metallic mineral industry declined most significantly, and the output value of traditional upstream raw material industries such as papermaking, textiles, wood and chemicals also dropped to varying degrees.
The growth pattern of the industry is expected to continue largely in 2026, with high-tech industries such as semiconductors and electronic components still leading the growth of the manufacturing sector. Within the machinery industry, the output value of generator sets is expected to maintain the fastest growth rate in both 2025 and 2026, while metallurgical machinery may continue to contract, mainly due to factors such as the sluggish construction industry and the low capacity utilization rate in the metallurgical industry.
Conclusion
Steady recovery, but challenges remain
Overall, driven by China's recovery, the global manufacturing industry will gradually warm up in 2025. In 2026, the stabilization of demand in Europe and the United States is expected to boost the global supply chain and provide support for China's exports. However, factors such as weak domestic demand, trade uncertainties and price competition still pose challenges. Whether the recovery of the manufacturing industry can be sustained depends on the actual recovery of domestic and international market demand and changes in the policy environment.
The current investment momentum has not yet recovered, and the short-term pressure on machinery manufacturers is greater than that on terminal manufacturing enterprises. The recovery of the machinery industry will be driven by long-term structural factors, especially the rising labor costs and the accelerated transformation towards automation. Therefore, despite the uncertainties in the short term, the demand for machinery is expected to accelerate its growth in the long term. It is expected that starting from 2027, the growth rate of China's machinery industry will exceed that of the terminal product manufacturing industry.
Note
1. The data in this article is derived from the Interact Analysis Manufacturing Industry Output (MIO) report. The forecast data is calculated based on the statistics before November 2025. The actual growth rate may be affected by factors such as policy adjustments and changes in the market environment.
2. Terminal manufacturing industry: This mainly refers to the industry that produces final products (such as food and beverages, electronic products, automobiles, etc.), and the products are usually directly targeted at consumers or enterprise customers.
About MIO
MIO (Manufacturing Industry Output) is a global manufacturing industry output tracking indicator launched by the Interact Analysis study. Based on the public data from statistics bureaus and other institutions in major countries and regions, MIO tracks the manufacturing industry in 45 key countries around the world and the development of 102 sub-sectors over the past 15 years. By combining the tracking of leading indicators such as investment and the monitoring of economic cycles, it predicts the growth of each industry over the next five years.