Global Manufacturing Growth Declines 2% in 2019- Says UNIDO
GILBERT EKUGBE
The United Nations Industrial Development Organisation (UNIDO) said global manufacturing growth has declined for the second consecutive year, dropping a marginal two per cent in 2019.
Manufactured goods account for 80 per cent of the world’s merchandise trade, and the current trade friction, mutual economic sanctions, uncertainties on Brexit and deterioration in the overall business environment has impacted negatively on the sector.
The agency’s report is based on the dip in goods from both China and the United States, the two leading industrialist nations.
The growth of the manufactured value added (MVA) of China, the world’s largest manufacturer, declined from 6.2 percent in 2018 to 5.5 percent in 2019, while the growth of the United States’ MVA dropped from 3.2 percent in 2018 to 2.0 percent in 2019.
The MVA growth in European and other industrialized economies followed a similar trend, while the slowdown in manufacturing in industrialized economies has in turn adversely affected manufacturing growth in developing and emerging industrial economies which fell to 2.0 percent in 2019 compared to 3.2 percent in 2018.
“These declining trends in global manufacturing are observed just five years after the adoption of the Agenda 2030 and its Sustainable Development Goals (SDGs). Contrary to the SDG9 target to significantly increase the share of industrial sectors in Gross Domestic Product and total employment, the share of manufacturing in industrialized and emerging industrial economies in 2010-2019 has dropped,” UNIDO added.
UNIDO said: “During the same period, MVA’s share in GDP in other developing economies and least developed countries (LDCs) marginally increased. However, the growth observed so far in developing countries falls short to the required pace for achieving SDG targets.”
Taking a closer look at data for LDCs shows that a few countries, namely Bangladesh, Ethiopia and Myanmar, have made significant progress in expanding their manufacturing industry, but however stated that many other LDCs, especially those in Africa, have experienced a decline in manufacturing and face the prospect of premature deindustrialization.
Analysis of sectoral data shows that China has surpassed the United States and Japan in the production of motor vehicles. China accounts for more than 25 percent of global motor vehicle production. Among other emerging economies, Mexico ranks fifth after Germany, and India ranks seventh after the Republic of Korea.
Workers in developing countries realize far less benefit from manufacturing employment than those in industrialized economies. In Latin American countries, for example, the share of wages and salary of value-added varies from 11.0 to 42.0 percent. In contrast, in Germany and other European countries, the share may amount to 45 percent.
UNIDO’s Yearbook presents detailed, country-specific, business structure statistics, which provide empirical evidence for formulating industrial policy and carrying out a comparative analysis of structural change and productivity. An analysis of global manufacturing’s current growth trends is provided by quarterly reports.
Underlying country data from which the Yearbook was compiled are accessible online through the UNIDO Statistics Data Portal. UNIDO maintains an international industrial statistics database covering mining and quarrying, manufacturing, electricity gas and water supply and the international trade of manufactured goods.
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