World manufacturing set for biggest collapse in decades but impacts uneven – UNIDO report

COVID-19 Impacts – Global Manufacturing

World Manufacturing Production – Statistics for Quarter II 2020
Global manufacturing has collapsed, but China’s manufacturing is showing early signs of recovery
UNIDO United Nations Industrial Development Organization
September 2020 :: 19 pages

Media Release
World manufacturing set for biggest collapse in decades but impacts uneven – UNIDO report
During the second quarter of 2020, manufacturing production fell sharply in most countries around the world, with the notable exception of China where output had already returned to moderate growth. On current estimates, UNIDO expects a decline in global manufacturing value added of 8.4 per cent for the year as a whole, which would make 2020 the worst year on official records for the sector.

In the second quarter of 2020 (April-June), global manufacturing output fell by 11.2 per cent compared with the same quarter in the previous year, according to official figures from the United Nations Industrial Development Organization (UNIDO). The dramatic drop reflects the economic impact of measures imposed to halt the spread of COVID-19, which overshadowed all other negative influences on the sector, including higher trade barriers and the impact of Brexit.

UNIDO anticipates ongoing disruptions to manufacturing over the coming months as the world continues to grapple with the impacts of the pandemic. “Based on this scenario, and on developments in manufacturing linked to other economic variables, UNIDO is forecasting a fall in global manufacturing value added of 8.4 per cent in 2020, which would mark the biggest collapse in output since official records began,” UNIDO Chief Statistician Fernando Cantu said.

Some countries are likely to be harder hit than others, with China expected to record a more modest drop of 1.6 per cent compared with the United States and Europe’s industrialized economies where value added in 2020 is forecast to plummet by 15 per cent and 14.3 per cent, respectively.

Cantu noted, however, that more time was needed to assess the full impact of containment measures on households, businesses and government balance sheets. In addition, he cautioned that “recent developments in several countries point to a possible second wave of the pandemic, which could require the return of harsher economic restrictions, with knock-on effects on supply and demand”.

Figures for the second quarter show a wide divergence between China and the rest of the world, as well as between and within developing and industrialized economies. China was one of the first countries to impose a lockdown and most of the impact was felt during the first three months of the year. By the second quarter, China’s manufacturing output had already returned to growth, increasing by 2.8 per cent year-on-year, led by industries such as computer electronics (11.2 per cent), electrical equipment (6.8 per cent) and machinery (6.3 per cent)…