FLAT FORECAST: U.S. MANUFACTURING GRAPPLES WITH GROWTH PAINS IN 2025

Despite record investment headlines, manufacturing leaders face a sobering 2025 marked by flat growth, rising costs, and cautious optimism for recovery.

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In recent years, U.S. manufacturing has taken centre stage in discussions around economic revitalisation, domestic resilience, and global competitiveness. From reshoring ambitions to billion-dollar factory announcements, the headlines have been upbeat. But peel back the layers, and the reality for 2025 reveals a far more sobering outlook.

According to the Spring 2025 Semi-annual Economic Forecast from the Institute for Supply Management (ISM), revenue growth for the U.S. manufacturing sector is projected to increase by a mere 0.1%—effectively flatlining after modest gains in 2024. This is a sharp revision from the 4.2% increase forecasted just months ago in December 2024.

For many manufacturers, this adjustment is more than just a number—it's a sign of deeper pressures gnawing at the industry's foundations.

TARIFFS CAST A LONG SHADOW

A major drag on growth has been the wave of new trade tariffs implemented by the Trump administration in April 2025. Although some measures were later rolled back, a sweeping 10% tariff on goods from over 150 countries remains in place. This has complicated procurement and raises the cost of raw materials across key industries.

As reported by Bisnow, major firms like Ford Motor Co. and DuPont have openly flagged losses linked directly to these trade policies. Ford alone estimates a $1.5 billion dent in net profits for the year. John Deere cited uncertainty in cross-border supply chains as a factor in delaying capital expenditure decisions.

ISM's survey reinforces this picture: raw material prices are projected to climb 7.5% in 2025.