Ulbrich Economic Update - Number 63 (August 2025)
Download the 15 page Economic Update for the full details of recent economic trends impacting all industries across the globe, as well as the summer PMA Triannual Report which provides a snapshot of the latest association activities and member benefits. Continue for the Executive Summary.
The Americas
U.S. MANUFACTURING MOMENTUM REMAINED MUTED IN JULY, with the ISM Manufacturing PMI contracting for a fifth consecutive month at 48.0, while the Services PMI slowed to 50.1, indicating marginal growth. Consumer confidence rose to 97.2 in July, up from 95.2 in June, signaling cautious optimism. Industrial production increased 0.3% in June, and manufacturing output edged up 0.1%. Durable goods orders fell sharply by 9.3%, the steepest decline since 2020, led by steep drops in aircraft and defense-related equipment.
The Conference Board’s Leading Economic Index fell 0.3% in June to 98.8, falling by 2.8% over the first half of 2025, a substantially faster rate of decline than the –1.3% contraction over the second half of 2024. Retail sales inched up 0.6% in June, while consumer spending edged up 0.1%. Nonfarm payrolls rose by 73,000 in July, while the unemployment rate ticked up to 4.2% and labor force participation dipped to 62.2%. The U.S. trade deficit narrowed to $60.2 billion in June, a 16% improvement from May, as exports slipped 0.5% and imports declined 3.7%. Factory orders fell 4.8% in June, reflecting softening global demand and slowing capital investment.
Steel Industry Updates
U.S. TARIFFS SPARK TRADE DISPUTES AND INVESTMENT SHIFTS, as Canada reverses duties on Turkish steel and launches new OCTG complaints. U.S. Steel names new board members to meet national security terms. Brazilian tariffs add pressure across the Americas.
Overseas
TRADE REALIGNMENTS ACCELERATE UNDER U.S. PRESSURE, with new tariffs on India, Indonesia, South Korea, and China sparking retaliation threats. India’s GDP outlook remains strong, while ASEAN jet fuel exports to Europe surged. U.S. sanctions disrupted Russian oil shipments to India, and China braces for more graphite and EV supply chain upheaval amid escalating global trade battles.
Automotive Trends
TARIFFS HIT ASIAN AUTOMAKERS HARD, with Mitsubishi and Hyundai suffering sharp Q2 profit declines due to steep U.S. tariffs, intensified global competition, and a rising yen. Toyota and Honda forecast significant earnings drops, while Chinese dealers warn of worsening price wars and overproduction. The U.S.-South Korea deal includes some relief, but uncertainty remains high across Asia’s auto sector.
Energy Sector News
U.S. GRID STRAINS UNDER AI-DRIVEN DEMAND, pushing capacity prices to record highs and electricity bills up 1–5%. China, Japan, and Australia are boosting renewable and defense-linked energy efforts: China’s graphite tariffs and rare earth exports shake up battery supply chains, while Japan partners with Vestas on wind tower steel. Vietnam faces new food energy pressures amid a worsening swine fever outbreak.
Metals & Commodities
CHINA BOOSTS RARE EARTH EXPORTS, hitting a 15-year high despite recent restrictions, as agreements with the U.S. and EU ease shipment approvals. The U.S. imposed a 93.5% tariff on Chinese graphite, spurring investor optimism in North American producers. Meanwhile, China’s new financial support for advanced manufacturing targets high-end materials and chip production.
Medical Insights
TARIFF PRESSURE TRIGGERS MAJOR INVESTMENTS, as AstraZeneca pledges $50B to expand U.S. manufacturing ahead of possible 250% pharma tariffs. Teva’s Ajovy becomes the first FDA-approved migraine prevention drug for children.
Aerospace Developments
JAPAN-AUSTRALIA STRIKE LANDMARK WARSHIP DEAL, the largest Japanese defense export in decades, as the two allies counter China’s Indo-Pacific influence. NASA awarded Firefly Aerospace a $176.7M contract for a 2029 Moon mission, deploying two rovers and three instruments to the lunar South Pole under the CLPS program. India’s aviation audit uncovers 51 safety violations at Air India, prompting regulatory scrutiny unrelated to its recent fatal crash.
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