World manufacturing growth decelerates further, according to UNIDO report

Business News

World manufacturing output rose by 3.2 percent in the third quarter of 2018, lower than the 3.4 percent recorded in the second quarter, according to World Manufacturing Production: Statistics for Quarter III, 2018, published by the United Nations Industrial Development Organization (UNIDO). Global manufacturing growth has now been declining for three consecutive quarters, amid rising tension over trade and tariffs among the leading manufacturing nations, especially the United States, members of the European Union and China.

The major setback was observed in the industrialized economies, which account for more than half of global industrial output. Disaggregated figures by region indicate much lower growth in Europe and East Asia compared to North America, where the manufacturing output rose by 3.4 percent.

Manufacturing output rose by 3.4 percent in the United States. However, growth was   less than 1.0 percent in Germany and France, while Italy faced negative growth. Among non-EU economies, manufacturing output rose by 3.6 percent in Belarus, 2.7 percent in Norway, 2.4 percent in the Russian Federation and 1.7 percent in Switzerland.

Among East Asian industrialized economies, manufacturing output dropped in Japan. Relatively higher growth at 4.8 percent was observed in Malaysia and 3.6 percent in Singapore.

The growth performance was much higher in developing and emerging industrial economies in the third quarter, although the overall impact of declining global growth was evident. China’s manufacturing output rose by 6.1 percent in the third quarter of 2018, which was lower than 6.4 percent in the second quarter. Slowdown was visible in a number of manufacturing sectors, including electrical equipment, motor vehicles and other transport equipment.

The manufacturing output growth of emerging and developing economies, excluding China, dropped to 3.0 percent in the third quarter compared to 3.6 percent in the second quarter. Regionally disaggregated figures suggested much lower growth in Latin American countries compared to that of Asia Pacific region.

The manufacturing output of Argentina, one of the largest manufacturers in Latin America, fell sharply by 7.2 percent in the third quarter. Manufacturing output rose by 1.6 percent in Brazil and 1.5 percent in Chile. Manufacturing in Mexico, which heavily depends on exports to the United States, rose to 2.7 percent growth in expectation of the North American trade agreement.

Asian countries maintained relatively higher growth in the third quarter. Manufacturing output rose by 6.0 percent in India with significant contributions from high-tech sectors such as pharmaceuticals and motor vehicles. Manufacturing output rose by 5.1 percent in Indonesia and 7.3 percent in Philippines.

Among African countries, manufacturing output rose in Cote d’Ivoire by 4.2 percent in the third quarter of 2018. Positive growth was observed also in Egypt, Morocco and Senegal. However, growth remained low in two large economies of Africa, namely Nigeria and the Republic of South Africa.

The UNIDO report also presents growth figures by manufacturing industry. Production of computer electronics and pharmaceutical products were listed among high-growth industries.

Leave a Reply