World manufacturing: one year of COVID-19

UNIDO

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 a year-over-year growth of 12.0 per cent 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 per cent 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 a moderate output growth of 3.2 per cent 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 per cent 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.

Figure 1. Quarterly growth of manufacturing output, percentage change compared to the same quarter of the previous year

Fig 1

Source: UNIDO Statistics based on data from official national sources.

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 per cent 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 per cent. 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 per cent and 9.0 per cent, respectively, in the first quarter of 2021.

Figure 2. Quarterly growth of manufacturing industries by technological intensity, percentage change compared to the same quarter of the previous year

Fig 2

Source: UNIDO Statistics based on data from official national sources.

In addition to the observed figures 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. A global output growth of 7.7 per cent is expected for 2021, similar to industrialized economies, where an output growth of 7.2 per cent is forecasted. Manufacturing in China will most likely grow by 9 per cent, indicating that the country’s pace of recovery is picking up speed, considering the plunge to -0.7 per cent 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 per cent in 2020 to 5.9 per cent growth in 2021.

Figure 3. Annual growth rates in manufacturing value added in constant 2015 US$

Fig 3

Source: UNIDO Statistics based on data from official national sources.

/UNIDO Public Release. This material comes from the originating organization/author(s)and may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.