The manufacturing sector continued to play a leading role in sustaining global trade growth during the first half of 2025, according to the latest Global Trade Update published by UNCTAD. Despite volatility in energy markets and geopolitical uncertainty, manufacturing exports expanded by about 9 percent year-on-year, consolidating the sector’s position as the main contributor to worldwide trade resilience.
UNCTAD data show that trade in both electrical and non-electrical machinery increased markedly in the second quarter of 2025. Electrical machinery rose by around 7 percent quarter-on-quarter, while non-electrical machinery recorded a 6 percent gain. These categories benefited from ongoing investment in industrial automation and digital infrastructure, as well as from rising demand for hardware supporting artificial intelligence systems.
Electronics as a whole outperformed other manufacturing segments, with a 17 percent year-on-year rise in trade value. Within this group, information and communication technology (ICT) products grew by 22 percent, reflecting a surge in demand for computing and networking equipment. Semiconductor trade also advanced, albeit at a slower pace of 10 percent, constrained by continued export restrictions.
Automotive trade shifts toward electrification
The automotive sector displayed uneven dynamics across different vehicle types. While overall automotive trade fell slightly on a 12-month basis (–2 percent), hybrid vehicles saw a strong rebound with a 23 percent annual increase, and electric vehicles registered a 17 percent quarter-on-quarter rise in Q2 2025. This shift signals growing global demand for low-emission transportation, supported by new manufacturing capacity and policy incentives across Asia and Europe.
Mixed results in other manufacturing categories
Trade in iron and steel declined by 8 percent quarter-on-quarter after a period of strong growth in 2024, but the category still posted a 24 percent year-on-year gain. Plastics, precision instruments, and prepared food products also contributed positively, each expanding between 4 and 8 percent over the past four quarters. By contrast, textiles and apparel grew modestly, reflecting subdued consumer spending in advanced economies.
Divergent trends in natural resources and agriculture
While manufacturing maintained its momentum, trade in natural resource products fell by 2 percent in Q2, weighed down by lower fossil fuel prices. Agricultural trade rose by 2 percent, led by strong demand and higher prices for coffee and other tropical commodities. Coffee, tea, and spices recorded the highest growth among agricultural products, up 15 percent quarter-on-quarter and 32 percent over the past year.
Outlook: manufacturing resilience amid uncertainty
According to UNCTAD, the manufacturing sector’s performance highlights its central role in stabilizing global trade despite continued policy shifts and supply-chain adjustments. Developing economies—particularly in East and South Asia—remain the primary engines of growth, supported by strong intra-regional trade and increasing industrial output.
At the same time, UNCTAD warns that emerging protectionist measures in key markets, such as new sector-specific tariffs in the United States, could affect export performance in coming quarters. Still, the overall outlook for manufacturing trade in 2025 remains positive, with electronics, machinery, and hybrid vehicle production expected to sustain expansion into the final quarter of the year.
