The most recent data, including the first months of 2021, confirm that global manufacturing production continues to recover, following a major drop during the first half of the year due to COVID-19. However, the pace of recovery is unequal. While manufacturing production in some countries, such as China, has reached and exceeded its pre-crisis production level, other countries still show only weak signs of recovery.
The latest World Manufacturing Report, published by the United Nations Industrial Development Organization (UNIDO), includes the most recent official data on manufacturing production across the world and points to year-over-year growth of 12.0 percent in the first quarter of 2021. However, the report also shows the different pace of recovery in different regions. China quickly bounced back, with a year-on-year growth rate of 38.2 percent in the first quarter, in part due to last year’s low base of comparison. Other emerging and developing economies have already reached their pre-pandemic output levels in the previous quarter, and continue with moderate output growth of 3.2 percent for the current quarter.
Industrialized economies, on the other hand, faced another wave of coronavirus infections in autumn 2020 and were forced to re-introduce stricter containment measures. Therefore, the recovery in these countries is still ongoing, with a first moderate increase of 1.5 percent in the first quarter of 2021. Since the end of last year, many (mostly industrialized) countries focused on widespread vaccination campaigns, although a fair and sustainable distribution around the world is necessary for future prosperity.
The different pace of recovery was not only observed at the country level. The UNIDO report reveals a similar trend among industrial sectors. Higher technology sectors recovered at a faster pace, with increases of at least 10.0 percent in the first quarter of 2021, while the output of low-technology industries registered a comparably lower year-over-year growth rate of 5.8 percent. Among others, the output of computers, as well as pharmaceuticals, had already been growing over the last three quarters, leading to increases of 26.2 percent and 9.0 percent, respectively, in the first quarter of 2021.
In addition for the first quarter of 2021, UNIDO’s report also includes revised estimates for manufacturing growth in 2020 and projections for 2021. The forecasts for global manufacturing point to signs of recovery in 2021, further confirming the different speeds across different regions. Global output growth of 7.7 percent is expected for 2021, similar to industrialized economies, where an output growth of 7.2 percent is forecasted. Manufacturing in China will most likely grow by 9 percent, indicating that the country’s pace of recovery is picking up speed, considering the plunge to -0.7 percent in 2020. The pace of recovery of developing and emerging industrial economies (excluding China) is predicted to be even more impressive, increasing from -6.2 percent in 2020 to 5.9 percent growth in 2021.