Five Machine Market Outlook for 2025

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When analyzing machinery market performance, two key factors facilitated short-term forecasts for manufacturing industry output (MIO) trackers. In recent years, machine production has not only been hit by high interest rates, but as a direct result, there has also been accumulation of high inventory levels. Over 2024 and 2025, the resulting death period could have meant that machine production would have been 12 months positive for growth otherwise. However, this photo is not consistent across all machinery industry sectors and is expected to perform particularly strong this year in sectors such as packaging machinery, mining & quarrying, semiconductor & electronics machinery production. It is driven by technological advancements, energy transitions and macroeconomic factors.

How are US tariffs affecting the Asian machinery market?

Regions such as Japan expect tariffs will have some negative impact on Asian markets despite a stronger year-to-date starting point. South Korea saw a decline in mechanical investment early in 2025, including semiconductor machinery, which appears to be a temporary decline as capital goods imports rise and machinery orders are rising. With regard to China, tariffs are unlikely to have a lot of impact as the majority of machines are consumed domestically.

What is the current outlook for packaging machinery for 2025?

Generally, expansion of factories in India, Vietnam and Mexico is expected to drive growth in the global packaging machinery sector, along with a potential increase in nearly the US issue. Three key factors that contribute to the growth of the packaging machinery industry are technological advancements (such as AI integration, IoT, predictive maintenance), sustainability, and cost pressure. Particularly due to the EU’s Packaging and Packaging Waste Regulation (PPWR), companies are also increasing demand for new integrated-enabled machines that handle rapid changeovers and various SKUs, but companies want to invest in more sustainable machines. Similarly, in the US, the FDA is increasingly focusing on the tampered functions of food and medicines.

What is the current outlook for semiconductors and electronic machinery for 2025?

Additionally, there is an increasing use of demand for three major drivers in the semiconductor industry: AI, 5G and electric vehicles. Some of the largest semiconductor equipment manufacturers, including ASML, applied materials and Tokyo Electronics, have undergone major capacity expansions. Currently there are 18 new semiconductor manufacturing projects preparing machine orders, including those in the US, China, Japan, Taiwan and Europe. Meanwhile, some territories are driving the rapid expansion of semiconductor production as governments consider it a national security issue and encourages the reuse of semiconductor production capacity. Our MIO trackers show the control of Asian countries in semiconductor production, particularly China (23%), Japan (20%) and South Korea (13%).

What are the current outlook for mining and quarrying machines for 2025?

The surge in the use of electric vehicles, wind turbines and battery storage has resulted in a boom in key mineral extraction, which has positively impacted the tunnel and extraction equipment market. Demand for mining and quarrying machines is growing in regions such as Australia and Canada. These are rich in the important minerals needed for energy transitions, copper, cobalt and lithium.

China currently controls rare earth mineral production, producing more than 40% of the world’s mining machinery. The US is moving to protect itself by granting 10 US mining projects fast 41 status to boost domestic mineral production. This should reduce America’s dependence on foreign sources, create new jobs and support economic growth. However, steel and aluminum tariffs could increase the cost of production of machinery in the United States.

What is the current machine tool outlook?

There are short-term concerns in the machine tool sector, but there is a better long-term outlook. The current industry environment for machine shops and US tariffs has forced some North American companies to reduce production due to lower domestic and international demand, but the long-term impact of tariffs on the US market is beneficial when more metals and automobile production is in practice in the US.

Meanwhile, China has integrated its position as the world’s largest machine tool producer in volume, but India has also emerged as an important player. We expect the machine tool market to shrink slightly in 2025. Currently, prospects are relatively low. This is because there are so many underlying issues in the sector that need to be addressed, such as by eliminating ice engines. If they can handle it, things could improve. An unexpected advantage is whether an increase in reflection in Europe will lead to the procurement of more European weapons and vehicles from within the block. And if that were the case, we found that demand for machine tools would increase appropriately.

What is the current outlook for textile machines?

China remains the largest producer of textile machinery, accounting for 60% of global production, but we can see a movement in apparel production in India, Vietnam and Bangladesh, which are driving demand for textile machinery in places like Turkey and India itself. In 2015, India accounted for 4% of textile machinery production, with MIO production value below $2 billion, and by 2025, the MIO production value had risen to 8% of total production and to $4 billion.

Final Thoughts

US tariffs have led to a recession in orders for new machinery, with owners worried about constant changes in fees and U-turns. As we saw in 2018 tariffs in 2018, new orders are expected to continue to rise until the customs enforcement date of July 10th. At this point, orders are expected to drop significantly. This has a knock-on effect throughout production. Europe continues to struggle, with January and February showing very poor numbers in certain sectors. For example, German agriculture, mining and textile machinery all fell by at least 10% year-on-year, with Italy and France struggling with similar fates.

However, as the analysis above shows, the photographs are inconsistent across all regions and machinery sectors. It appears that China’s entire industry will begin recovery in 2025. This has been strengthened in 2026, which will benefit the country’s mechanical sector, but semiconductors, mining, quarrying and packaging have strengthened growth driven by a wide range of sector-specific factors. And we haven’t yet seen what the U.S. final trade tariffs are to fully analyze the potential impact on the market. It’s enough to say that there is a mix of outlook for the 2025 machine manufacturing market.