Global manufacturing growth faces setback amid trade and tariff tensions between largest manufacturers, China and the USA

Global manufacturing growth faces setback amid trade and tariff tensions between largest manufacturers, China and the USA

VIENNA, 12 September 2019 - World manufacturing production growth is expected to slow down in 2019 as a result of continued tensions over trade and tariff issues between the world’s two largest manufacturers - China and the United States. According to latest estimates from the United Nations Industrial Development Organization (UNIDO), the growth rate of global manufacturing value added (MVA) is likely to drop to 2.7 per cent in 2019 compared to 3.2 per cent of 2018.

A report released today by UNIDO Statistics observes that the pace of MVA growth has been slowing down in both the United States and China. While annual growth in the United States is likely to drop to 1.9 per cent in 2019 following a rate of 3.0 per cent in 2018, China’s manufacturing growth is expected to drop below 6.0 per cent for the first time in decades.

The UNIDO report presents the expected growth figures of global manufacturing in 2019 and the actual growth rates for the recent quarters of 2019.

The slowdown in China and the United States has had a wider impact on global manufacturing. US restrictions on the import of several manufactured goods, compounded by uncertainties over Brexit, have resulted in a downturn in European manufacturing, which is expected to grow at less than 1.0 per cent in 2019. Growth in East Asia is expected to be moderate at a rate of 1.6 per cent.

The overall growth of industrialized economies in 2019 is expected to drop to 1.3 per cent from 2.1 per cent in 2018. Developing and emerging industrial economies (excluding China) are expected to achieve a slightly higher growth in 2019 at around 3.0 per cent, compared to 2.7 in 2018. At the regional level, Latin American countries are expected to reverse the declining trend observed in recent years.

The report also presents the figures for quarterly growth trends of global manufacturing. According to the report, the world manufacturing growth rate dropped to 1.7 per cent in the second quarter of 2019 , compared to 2.2 per cent in the first quarter of the year.

For the first time in several years, manufacturing in industrialized economies has plunged to a negative growth rate. The decline was mainly attributedto the slowdown in Europe and East Asia. Manufacturing output dropped in such major industrialized economies as Germany, by 5.0 per cent, Italy, by 1.5 per cent, Japan, by 1.2 per cent and the Republic of Korea, by 2.6 per cent. 

The manufacturing output of developing and emerging industrial economies, excluding China, rose at a marginal rate of 1.0 per cent in the second quarter. Several emerging industrial economies encountered sluggish growth. Manufacturing output rose by 2.9 per cent in India, and 1.4 per cent in Mexico but dropped by 3.5 per cent in Turkey.

The report also presents the growth estimates for manufacturing industries. Ongoing deceleration has affected the growth of high-technology sectors. In the second quarter of 2019, high-tech sectors had lower growth than low-technology sectors that mainly produce the basic consumer goods such as food beverages and clothes.

The full report is available here

UNIDO regularly releases the statistics on current growth trends of global manufacturing at country and regional level.

UNIDO maintains an international industrial statistical database in accordance with the mandate of the United Nations Statistics Commission. Data can be downloaded through online access or obtained through CD products and publications.

For more information, please contact:

Shyam Upadhyaya
UNIDO Chief Statistician