Global manufacturing output in the first quarter of the year, slowed down by six per cent due to China’s lockdown to contain the spread of COVID-19, as well as ongoing uncertainties arising from trade restrictions between the US and China and the much-discussed Brexit.
According to the United Nations Industrial Development Organisation (UNIDO), massive decline of manufacturing output for industrialized, as well as developing and emerging industrial economies (excluding China), is expected in the following period as large number of industrialized countries partially shut down their economies as a containment strategy for COVID-19 from March 2020 onwards.
In the first quarter of 2020, industrialized economies registered a contraction in manufacturing output of 2.5 per cent. Among Asian industrialized economies, manufacturing output remained almost unchanged, mainly due to the solid performance of South Korea and Taiwan, ROC.
Unlike other continents, Africa’s manufacturing output indicated a slight increase of 0.2 per cent for the first quarter of 2020. Compared to the first quarter of the previous year, growth estimates based on limited data for African countries generally indicated a moderate rise in manufacturing output of 0.7 per cent.
In Nigeria, latest data from the National Bureau of Statistics (NBS) showed that manufacturing sector’s real contribution to GDP in 2020 first quarter dropped to 9.65%, lower than the 9.79% recorded in first quarter of 2019 but higher than the 8.74% recorded in Q4 2019.
With growth rates of 6.3 per cent, 3.1 per cent, 0.7 per cent and 0.3 per cent, Cˆote d’Ivoire, Morocco, Nigeria and Senegal, respectively, represented countries with expanding year-on-year manufacturing production in the first quarter of 2019. The region’s most industrialized country, South Africa, experienced an expansion in manufacturing output as well, reaching a year-on-year growth rate of 0.5 per cent.
Compared to the previous quarter, however, the seasonally adjusted estimates implied a decline of 2.4 per cent. The important automotive industry recorded one of the most dramatic plunges (-6.8 per cent compared to the fourth quarter of 2018).
In Europe, manufacturing growth was much lower in Eurozone economies compared to other European Union (EU) countries, as already experienced in previous quarters. Italy registered one of the steepest output declines of 11 per cent because of the early outbreak of COVID-19. Among non-EU economies, manufacturing output dropped by 6.0 per cent in the United Kingdom, mainly due to Brexit and related uncertainties.
China’s manufacturing output in the first quarter of 2020 was hit hard by the pandemic and dropped by 14.1 per cent in a year-over-year comparison. Almost all Chinese industries experienced negative growth rates, including motor vehicles (27.3 per cent) and textiles (22.5 per cent).
Manufacturing production in developing and emerging industrial economies (excluding China), not yet affected by COVID-19, recorded a reduction of 1.8 per cent. Developing economies in Asia and the Pacific region registered a negative year-over-year growth rate of 2.5 per cent for the first quarter. Vietnam was among very few countries in the region that maintained a high manufacturing growth, whereas India’s manufacturing output further dropped.
The upcoming economic crisis due to COVID-19 is expected to further weaken economies in the Latin America region which already witnessed a reduction in manufacturing output of 2.8 per cent in year-on-year comparison.