US Export Plan - Sector Report - Engineering and Advanced Manufacturing

Industry trends

Over the years Scotland has shifted from traditional heavy industries to more specialised high-value sectors such as aerospace, pharmaceuticals, precision engineering and space technology. Glasgow, for example, is now a European leader in small satellite manufacturing^[6].

In both the US and Scotland the sector is embracing Industry 4.0 technologies, including automation, robotics, AI and data-driven manufacturing. In particular, ‘smart manufacturing’ is seeing significant growth in the US and is projected to grow from $52.65 billion in 2024 to $116.48 billion by 2029 at a CAGR of 17.2% during the forecast period^[7]. This is being driven by industrial collaborations, Government initiatives and funding and increasing investment in ‘smart factory’ projects. This growth is driving demand for expertise in automation, robotics and precision engineering, aligning well with Scotland capabilities. In Scotland, initiatives such as Made Smarter and the Smart Factory Innovation Hub are helping businesses harness manufacturing data to boost productivity and highlight the accessibility of Industry 4.0 for companies of all sizes.^[8] This technological shift is also demanding a skills transformation in the sector, with an increasing focus on digital literacy, automation expertise and sustainability skills.

The long-term trajectory of the sector is also shaped by the net-zero agenda. Scotland’s net-zero targets for 2045 are driving adoption of low-carbon manufacturing, circular economy principles, and electrification. Initiatives at NMIS focus on lightweighting, near-net-shape manufacturing, remanufacturing, and resource efficiency, all aimed at reducing emissions and waste while improving competitiveness^[9]. These trends align with global sustainability imperatives and create opportunities for Scottish firms to lead in green manufacturing solutions. While there is a mixed picture at the federal government level in the US in terms of net zero, a range of states maintain ambitious goals in this regard, and companies are still importing products and services that support their net zero and green ambitions.

Tariffs on imports into the US, and the evolving position on potential rates, have created some uncertainty for Scottish exporters in this sector. However, there is still strong demand for precision engineering and advanced manufacturing components, driven by growth in high-tech sectors such as aerospace, defence and medical devices. For example, the US aerospace and defence market is projected to grow from $525.16 billion in 2025 to $694.86 billion by 2030, reflecting a 5.76% CAGR over this period^[10].

The US is seeing a growing trend of reshoring, as companies bring production back to domestic facilities to reduce reliance on global supply chains. This shift is driven by several factors, including changes in trade policies, the introduction of tariffs, which have made offshoring less attractive, and some incentives. Global events such as the COVID-19 pandemic and rising geopolitical tensions have further exposed supply chain vulnerabilities, prompting businesses to relocate production closer to home. As a result, some US states are experiencing a resurgence in manufacturing activity. While this trend signals a reduced dependence on imports overall, it also creates potential opportunities for Scottish exporters to target states with expanding industrial bases, and for those providing manufacturing and engineering services that could support reindustrialisation.