Add us as your preferred source on Google to see more of our content in Search.
Add to Preferred SourcesThe social and economic restrictions implemented around the globe to contain the spread of the COVID-19 virus caused a steep decline in manufacturing activity. However, following the easing of some measures in the middle of the year, economic activity has started to bounce back.
The latest official statistics for the third quarter of 2020 show a quarter-on-quarter rise of 12.1 percent in manufacturing output compared to the significant drops of 7.9 and 4.6 percent recorded in the first and second quarters of the year, respectively. Still, despite the quarterly recovery, output remains 1.1 percent down on the same period last year.
Detailed official data give further insights across regions and show common trends but also differences. For instance, China felt the impact of COVID-19 earlier during the first quarter of 2020, due to an earlier lockdown. But its manufacturing output grew by 8.2 percent year-on-year during the third quarter, already exceeding its pre-crisis level and reverting to previous growth trends.
On the other hand, most industrialized and developing economies suffered the largest impact of the economic restrictions in the second quarter of the year, but started recovering soon afterwards. In the third quarter, these groups of economies returned to growth, although they have yet to reach their pre-crisis production levels.
The data also show that the crisis had varying effects on different industries. During the third quarter of 2020, medium-high and high technology industries already registered a growth of 0.1 percent compared to the same period of last year, sustained by positive trends in the production of basic pharmaceuticals (2.6 percent), computer, electronic and optical products (5.7 percent) and electrical equipment (4.8 percent). However, capital and durable goods, such as machinery and motor vehicles, continued to register negative yearly growth rates due to shrinking demand. Low technology manufactures also showed a weaker recovery.
Even if manufacturing activity across most of the world showed signs of recovery in the third quarter, near-term risks remain high. The full impact of COVID-19 is still uncertain, as various industrialized countries experienced a renewed surge in COVID-19 cases in late 2020 and imposed new economic restrictions. Before improved treatment and vaccines become widely available, new waves of the pandemic, and their disastrous impact on people and businesses, cannot be discounted.
Updated UNIDO forecasts for global manufacturing value-added point to a yearly drop of 8.7 percent in 2020. While China’s manufacturing sector is expected to reduce its production by only 1.4 percent this year, the fall in the United States and Europe’s industrialized economies looks likely to reach 11.6 and 14.1, respectively.
Read the report: World Manufacturing Production
Original source: UNIDO