UNIDO Predicts 2.7% Plunge In World Manufacturing Growth In 2019.
By GILBERT EKUGBE
The United Nations Industrial Development Organisation (UNIDO) has predicted a plunge of 2.7 percent in the world manufacturing growth in 2019 owing to protracted trade war between China and the United States,
the world’s two largest manufacturers.
The UN agency noted that manufactured goods account for over 80 per cent of the total merchandise exports of both countries, and predicated on the 3.2 percent dip in global merchandise trade in 2018, the latest estimate show world manufacturing value added (MVA) is expected to drop to 2.7 per cent in 2019.
“The pace of MVA growth has been slowing down both in 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 3.0 per cent in 2018, China’s manufacturing growth is also expected to fall to 5.6 per cent from 6.1 per cent in 2018,” the report gathered.
Trade and tariff frictions between the United States and Europe are taking toll, and together with the U.S restrictions on the import of several manufactured goods, and the uncertainties over Brexit, European manufacturing is expected to grow at slightly less than 1.0 per cent in 2019.
UNIDO stressed that world manufacturing output growth has been decelerating since 2018, which it said continued in the second quarter of 2019 amid
escalating trade tensions between the United
States and China, with manufacturing output
growth down to a rate of 1.7 per cent on the back of 2.2 per cent in the first quarter of the year.
The report noted that the manufacturing sector which plays dominant role in global merchandise trade has
been hit hard by tariffs and associated uncertainties.
Comparing the growth of world manufacturing output
in percentage compared to the same quarter of the previous year, UNIDO revealed that industrialized economies, which account for more than half of world industrial output, faced a contraction in the second quarter of 2019 while manufacturing output decreased by a mere 0.4 per cent, compared to the second quarter of 2018.
“After an accelerated slowdown in manufacturing output growth in the last quarter of 2018, developing and emerging industrial economies showed a tendency to stabilize in the first as well as the second quarter of 2019, resulting in a slightly improved year-on-year growth rate of 0.9 per cent in the first and 1.0 per cent in the second quarter of the year after the plunge to 0.6 per cent in the fourth quarter of 2018,” UNIDO said.
UNIDO added: “Compared to the second quarter of the previous year, growth estimates based on limited
data for African countries generally indicated
a rise in manufacturing output of 2.0 per cent.
Among others, Egypt’s and South Africa’s manufacturing output expanded by 2.2 and 0.9 per
cent respectively.”
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