Global Manufacturing Growth Slows 1.2% on Q3 ’19
By Adedapo Adesanya
The global manufacturing output growth slowed down by 1.2 percent in the third quarter of 2019, a report by the United Nations Industrial Organisation (UNIDO) has revealed.
According to the report, the slow development was caused by rising tensions over international trade between major economies of the world as production declined in major industrialised countries including Germany, Japan, and the United States.
Business Post gathered that in industrialised countries, manufacturing output fell by 0.7 percent, compared to the same quarter in the previous year, with the production of general machinery, electrical goods and automobiles the sectors mainly affected.
In the motor vehicles production sector, top producers led by German companies had the highest drop at 7.7 percent, followed by Italy and France at 7.5 percent and 4.1 percent respectively.
Among Asian industrialised economies, manufacturing output dropped in Japan, the Republic of Korea and Singapore.
In Europe, manufacturing growth was much lower in Eurozone economies compared to other European Union (EU) countries.
Among non-EU economies, manufacturing output rose by 3.7 percent in Belarus, 2.9 percent in Norway and 2.4 percent in Russia.
On its part, China maintained relatively higher growth at 5.1 percent, however this was the lowest growth for several years, according to the report. It was disclosed that China’s manufacturing growth rate has been consistently falling since 2017. However, this did not affect its position as China still contributed to most of the growth of global manufacturing output.
The report added that the impact of the slowdown was quickly spreading to developing economies. For instance, India, one of the largest manufacturers of developing world, recorded negative growth for the first time this century due to a decline in exports and weaker domestic demand.
Manufacturing output also dropped in Thailand and Malaysia. The overall growth of Asia and the Pacific region, excluding China, has been estimated at less than 1.0 percent for the third quarter of 2019, compared to 3.0 percent in Q2 2019.
It was revealed that after a short-lived recovery, manufacturing output again plunged to negative growth in Latin America, mainly due to production decline in Argentina and Brazil. The growth rate of Mexico and Colombia was not up to one percent.
Manufacturing growth was also sluggish in Africa. The overall growth rate for the continent was 0.6 percent, the lowest since the fourth quarter of 2017. The manufacturing output of South Africa declined by 1.8 percent.
The global slowdown of manufacturing output according to UNIDO is a serious challenge to achieving Sustainable Development Goal 9 on industrialization, especially for least developed countries (LDCs). This goal of the SDG 9 aims to double the share of the industry in GDP of LDCs by 2030.