Predictions are difficult—especially about the future.
I mostly discard all analyst predictions about the future of manufacturing markets. There are so many variables that cannot be foreseen. Supply chain, technologies, sudden bankruptcies. Of all I’ve seen, I like the modeling by Interact Analysis the best. The do extensive research.
They sent me a recent report by Jack Loughney, senior data analyst, who maintains the Manufacturing Industry Output Tracker (MIO).
His first conclusion, which fits neatly with my look at the major automation suppliers, calls the current outlook “challenging.”
The overall outlook for global manufacturing is challenging for this year, with many companies reporting a decline in orders and most regions expected to see a contraction. However, there are some positive signs on the horizon, particularly in the US, and many territories will end the year in a slightly better position than expected, according to results from our latest Manufacturing Industry Output (MIO) Tracker.
Recent research.
Now that we have greater visibility of how 2024 will pan out, in the wake of numerous industry trade shows and discussions with executives, we have revised our forecasts to reflect this. Our prediction for a soft 2024 for global manufacturing followed by a “strong-ish” recovery next year is mostly holding. The message we received from trade shows is that order books are shrinking, but we forecast an upturn in manufacturing activity towards the end of this year or into the beginning of 2025, leaving many territories in a better-than-expected position. However, until there is a recovery, it is difficult to judge how strong or sustained it will be.
Although we predict a recovery will take place during 2025, it is not immediately clear where this will come from and we have introduced a small downward revision in our projected growth for China in 2024 (from 2.8% in the previous edition to 2.4%). With China contributing almost half of the total manufacturing market’s value and currently propping-up overall growth at a global level, any revision or turbulence in the Chinese market will have a significant impact on the global outlook and could see a small contraction in the MIO compared with 2023.
There are still imponderables when it comes to how and when recovery in global manufacturing – and within the manufacturing machinery segment in particular – will take place. China is experiencing a series of economic challenges and when and how successfully it overcomes these will have a significant bearing on the global outlook. Global political unrest and elections such as the US Presidential Election in November will also have a bearing on outcomes for the manufacturing industry. However, all the signs point to there being a recovery in the not-too-distant future and a growing optimism about it happening in the first half of 2025. This is backed up by our discussions with industry professionals and attendance at international trade shows.
