Global manufacturing sustains high growth, slight deceleration apparently sign of impact of tariff uncertainties

Business News

VIENNA: UNITED Nations Industrial Development Organisation (UNIDO) said yesterday, after significantly improved growth in 2017, global manufacturing may be facing a downturn related to newly announce trans-Atlantic trade barriers.

According to estimates, global manufacturing output rose by 4.2 percent in the first quarter of 2018, which was slightly lower than 4.7 per cent of the last quarter of 2017.

The manufacturing output of industrialized economies rose by the lower rate of 2.9 percent in the first quarter of 2018, compared to 3.5 per cent in the last quarter of 2017. The manufacturing output growth of China, which accounts for a quarter of global manufacturing production, also fell marginally, to 6.3 percent in the first quarter of 2018 from 6.8 percent in previous quarter.

According to UNIDO’s World Manufacturing Production Statistics for Quarter I, 2018 report, the full impact of tariff uncertainties on the dynamics of global manufacturing is yet to be seen as the first quarter figures indicate only a marginal slowdown. Observed growth rates are still high but deceleration is visible in all country groups, including the developing and emerging industrial economies where manufacturing output increased by 4.8 percent in the first quarter of 2018 compared to 5.3 percent in the previous quarter.

The manufacturing of European industrialized economies, which hit record high growth of 5.0 percent in the last quarter of 2017, rose by 4.1 percent in the first quarter of 2018. Among the major economies, manufacturing output rose by 4.2 per cent in Germany and 4.6 percent in Italy. However, the performance of France was much weaker, at 2.0 percent.

A number of European Union (EU) economies achieved high manufacturing growth in the first quarter of 2018. Manufacturing output rose by 6.4 per cent in Austria, 5.8 per cent in Estonia and 9.3 per cent in Slovenia.

Among non-EU economies, high growth was observed in Belarus: 9.9 percent and Serbia 6.0 percent, while growth was marginal in Norway and the Russian Federation.

The manufacturing output of the United States rose by 2.5 percent in the first quarter. In East Asia, manufacturing output rose by 2.6 per cent in Japan and 5.2 per cent in Malaysia. However, manufacturing output dropped in the Republic of Korea.

Among emerging industrial economies, India performed well, with 7.0 percent growth. Among other fast growing economies, manufacturing output rose by 5.5 per cent in Indonesia and Vietnam.

Latin America is back on the recovery path with 2.7 percent growth of manufacturing output in the first quarter. Notable growth at 4.4 percent was observed in Brazil, while 3.0 percent growth was observed in Argentina, Chile and Uruguay.

Estimates based on limited data showed some slowdown in Africa, where manufacturing output rose by 1.9 percent in the first quarter of 2018, lower than 2.3 percent in the last quarter of 2017. Lower growth was observed in major African economies, with manufacturing output rising by 1.1 percent in Egypt, 2.0 percent in Nigeria and 1.5 per cent in South Africa.

The UNIDO report also presents growth figures by manufacturing industry. Output from the medium-high and high-tech industry rose by 5.0 percent, higher than average growth, indicating the shift of global of manufacturing to high-technology sectors. At the same time, high growth was also observed in manufacturing of essential consumer goods, with a 4.8 percent growth in food manufacturing.   The full report is available here


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