Growth in world manufacturing has continued to slow down amid rising tensions over international trade among the major economies. The rate of global manufacturing output growth dropped to 1.2 percent in the third quarter of 2019, mainly due to a production decline in major industrialized economies including Germany, Japan and the United States.
For industrialized countries, manufacturing output fell by 0.7 percent compared to the same quarter in the previous year, with the production of general machinery, electrical goods and automobiles the sectors mainly affected. Production of motor vehicles dropped by 7.7 percent in Germany, 7.5 percent in Italy and 4.1 percent in France. Among Asian industrialized economies, manufacturing output dropped in Japan, the Republic of Korea and Singapore.
In Europe, manufacturing growth was much lower in Eurozone economies compared to other European Union (EU) countries (the Eurozone is a monetary union of 19 of the 28 EU member states). Among non-EU economies manufacturing output rose by 3.7 percent in Belarus, 2.9 percent in Norway and 2.4 percent in the Russian Federation.
China maintained relatively higher growth at 5.1 percent but it was the lowest growth for several years. China’s manufacturing growth rate has been consistently falling since 2017. However, China still contributes most of the growth of the global manufacturing output.
The impact of slowdown is quickly spreading to developing economies. The manufacturing output of India, one of the largest manufacturers of developing world, plunged to the negative growth for the first time this century due to a decline in exports and weaker domestic demand. Manufacturing output also dropped in Thailand and Malaysia. Overall growth of Asia and Pacific region, excluding China, has been estimated at less than 1.0 percent for the third quarter of 2019, compared to 3.0 percent in the same quarter in the previous year.
After a short-lived recovery, manufacturing output again plunged to negative growth in Latin America, mainly due to production decline in Argentina and Brazil. The growth rate of Mexico and Colombia was less than one percent.
Manufacturing growth was also sluggish in Africa. The overall growth rate for the continent was 0.6 percent, the lowest since the fourth quarter of 2017. The manufacturing output of the Republic of South Africa declined by 1.8 percent.
The global slowdown of manufacturing output poses a serious challenge to achieving Sustainable Development Goal 9 on industrialization, especially for least developed countries (LDCs). This goal aims to double the share on the industry in GDP of LDCs by 2030.
Read and download the report: World Manufacturing Production
Original source: UNIDO
Published on 09 December 2019
