Global Manufacturing Sustains High Growth As UNIDO Alerts Tariff May Slow Down Growth

After significantly improved growth in 2017, global manufacturing may be facing a downturn related to newly announced trans-Atlantic trade barriers, UNIDO said in a statement.

According to estimates, global manufacturing output rose by 4.2 per cent in the first quarter of 2018, which was slightly lower than 4.7 per cent of the last quarter of 2017.

The manufacturing output of industrialised economies rose by the lower rate of 2.9 per cent in the first quarter of 2018, compared to 3.5 per cent in the last quarter of 2017.

The manufacturing output growth of China, which accounts for a quarter of global manufacturing production, also fell marginally, to 6.3 per cent in the first quarter of 2018 from 6.8 per cent in previous quarter.

According to UNIDO’s World Manufacturing Production Statistics for Quarter I, 2018 report, the full impact of tariff uncertainties on the dynamics of global manufacturing is yet to be seen as the first quarter figures indicate only a marginal slowdown.

Observed growth rates are still high but deceleration is visible in all country groups, including the developing and emerging industrial economies where manufacturing output increased by 4.8 per cent in the first quarter of 2018 compared to 5.3 per cent in the previous quarter.

The manufacturing of European industrialized economies, which hit record high growth of 5.0 per cent in the last quarter of 2017, rose by 4.1 per cent in the first quarter of 2018.

Among the major economies, manufacturing output rose by 4.2 per cent in Germany and 4.6 per cent in Italy.

However, the performance of France was much weaker, at 2.0 per cent.
A number of European Union (EU) economies achieved high manufacturing growth in the first quarter of 2018.

Manufacturing output rose by 6.4 per cent in Austria, 5.8 per cent in Estonia and 9.3 per cent in Slovenia.

Among non-EU economies, high growth was observed in Belarus: 9.9 per cent and Serbia 6.0 per cent, while growth was marginal in Norway and the Russian Federation.

The manufacturing output of the United States rose by 2.5 per cent in the first quarter. In East Asia, manufacturing output rose by 2.6 per cent in Japan and 5.2 per cent in Malaysia. However, manufacturing output dropped in the Republic of Korea.

Among emerging industrial economies, India performed well, with 7.0 per cent growth. Among other fast growing economies, manufacturing output rose by 5.5 per cent in Indonesia and Vietnam.

Latin America is back on the recovery path with 2.7 per cent growth of manufacturing output in the first quarter. Notable growth at 4.4 per cent was observed in Brazil, while 3.0 per cent growth was observed in Argentina, Chile and Uruguay.

Estimates based on limited data showed some slowdown in Africa, where manufacturing output rose by 1.9 per cent in the first quarter of 2018, lower than 2.3 per cent in the last quarter of 2017.

Lower growth was observed in major African economies, with manufacturing output rising by 1.1 per cent in Egypt, 2.0 per cent in Nigeria and 1.5 per cent in South Africa.

The UNIDO report also presents growth figures by manufacturing industry. Output from the medium-high and high-tech industry rose by 5.0 per cent, higher than average growth, indicating the shift of global of manufacturing to high-technology sectors.

At the same time, high growth was also observed in manufacturing of essential consumer goods, with a 4.8 per cent growth in food manufacturing.

UNIDO is the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization and environmental sustainability.

As of 17 May 2018, 168 States are Members of UNIDO. They regularly discuss and decide UNIDO’s guiding principles and policies in the sessions of the Policymaking Organs.

The mission of the United Nations Industrial Development Organization (UNIDO), as described in the Lima Declaration adopted at the fifteenth session of the UNIDO General Conference in 2013, is to promote and accelerate inclusive and sustainable industrial development (ISID) in Member States.

The relevance of ISID as an integrated approach to all three pillars of sustainable development is recognized by the recently adopted 2030 Agenda for Sustainable Development and the related Sustainable Development Goals (SDGs), which will frame United Nations and country efforts towards sustainable development in the next fifteen years.

UNIDO’s mandate is fully recognized in SDG-9, which calls to “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”. The relevance of ISID, however, applies in greater or lesser extent to all SDGs.

Accordingly, the Organization’s programmatic focus is structured in four strategic priorities: Creating shared prosperity ; Advancing economic competitiveness ; Safeguarding the environment and  Strengthening knowledge and institutions.

Each of these programmatic fields of activity contains a number of individual programmes, which are implemented in a holistic manner to achieve effective outcomes and impacts through UNIDO’s four enabling functions: (i) technical cooperation; (ii) analytical and research functions and policy advisory services; (iii) normative functions and standards and quality-related activities; and (iv) convening and partnerships for knowledge transfer, networking and industrial cooperation.

In carrying out the core requirements of its mission, UNIDO has considerably increased its technical services over the past ten years.

At the same time, it has also substantially increased its mobilization of financial resources, testifying to the growing international recognition of the Organization as an effective provider of catalytic industrial development services.