World manufacturing growth expected to remain stable despite signs of deceleration

Continuing uncertainties related to trans-Atlantic trade, the so-called ‘Brexit”, and economic sanctions have weakened the dynamism of global industrial growth seen in 2016-2017 but it is expected to remain stable in 2018, according to a report released on September 11 by the United Nations Industrial Development Organization (UNIDO).

World manufacturing value added (MVA) is likely – according to the latest estimates – to sustain a 3.9 percent growth rate in 2018. The manufacturing output of industrialized economies is expected to rise by 2.7 percent in 2018, while much higher growth, at 4.4 percent, is estimated for developing and emerging industrial economies. China’s MVA growth rate is expected to fall to 6.1 percent in 2018, compared to 6.5 per in 2017.

As well as expected growth rates in 2018, the UNIDO report presents the MVA growth figures for the second quarter of 2018. These figures indicate a slowdown in global manufacturing since the beginning of 2018. World MVA rose by 3.8 percent in the second quarter, lower than the 4.2 percent growth in the first quarter of 2018, but still indicative of a healthy state of global manufacturing.

Observed growth rates are still positive but deceleration is visible in all country groups indicating the impact of global trade uncertainties on manufacturing production. Relatively lower growth rates were observed in major industrialized economies, such as 1.8 percent in the United States, 1.4 percent in the United Kingdom, 2.9 percent in Germany and 2.1 percent in Japan. Manufacturing growth rates also dropped in Belarus, Finland, and the Russian Federation.

The UNIDO report also presents growth figures by manufacturing industry. The highest growth in the second quartpercent8.2 percent – was reported for pharmaceutical products. The production of computer, electronic and optical products rose by 8.2 percent.

Positive growth worldwide was observed in the production of essential consumer goods, such as food, beverages and wearing apparel. At the same time, the production of tobacco products fell in industrialized and other developing economies, although it rose significantly – at the rate of 5.9 percent – in China.

Read and download the report World Manufacturing Production

Original source: UNIDO
Published on 11 September 2018