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Manufacturing growth setback amid US-PRC trade war: UNIDO

Sep '19
Pic: Shutterstock
Pic: Shutterstock
World manufacturing production growth may slow down in 2019 because of the continuing US-China trade conflict, according to latest estimates from the United Nations Industrial Development Organisation (UNIDO), which said 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 in 2018.

A report released recently 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 per cent in 2018, China’s manufacturing growth is expected to drop below 6.0 per cent for the first time in decades.

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 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 industrialised 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 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 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 industrialised economies has plunged to a negative growth rate. The decline was mainly attributed to the slowdown in Europe and East Asia.

Manufacturing output dropped in Germany by 5 per cent, in Italy by 1.5 per cent, in Japan by 1.2 per cent and in South Korea by 2.6 per cent.

The manufacturing output of developing and emerging industrial economies, excluding China, rose at a marginal rate of 1 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.

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. (DS)

Fibre2Fashion News Desk – India

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