‘Global Industrial growth to remain stable despite Brexit deceleration’, China, US face-off

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Global industrial growth is expected to remain stable this year, despite continuing uncertainties related to trans-Atlantic trade, the Brexit, and economic sanctions, which have weakened the dynamism of global industrial growth seen in 2016 and 2017.

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A United Nations Industrial Development Organisation (UNIDO) report released this week said world manufacturing value added (MVA) is likely to sustain a 3.9 per cent growth rate in 2018.

The report said manufacturing output of industrialised economies is expected to rise by 2.7 per cent this year, while much higher growth, at 4.4 per cent, is estimated for developing and emerging industrial economies.

The UNDP report, which was accessed by The Nation, however, said China’s MVA growth rate is expected to fall to 6.1 per cent this year, compared to 6.5 per cent in 2017.

The report said world MVA rose by 3.8 per cent in the second quarter, lower than the 4.2 per cent growth in the first quarter of 2018, but still indicative of a healthy state of global manufacturing.

It, however, observed that growth rates are still positive, but deceleration is visible in all country groups, indicating the impact of global trade uncertainties on manufacturing production.

The manufacturing output of industrialised economies rose by 2.5 per cent in the second quarter, a slower pace than the 2.9 per cent in the first quarter of the year.

Relatively lower growth rates were observed in major industrialised economies, such as 1.8 per cent in the United States, 1.4 per cent in the United Kingdom, 2.9 per cent in Germany and 2.1 per cent in Japan.

Manufacturing growth rates also dropped in Belarus, Finland and the Russian Federation.

The report added that deceleration is also becoming obvious in developing and emerging industrial economies. It said, for instance, that in the second quarter of 2018, the manufacturing output of these countries grew 3.7 per cent, compared to 4.8 per cent in the first quarter.

“The manufacturing growth rate dropped from 4.7 per cent to 0.8 per cent in Brazil, from 7.1 per cent to 5.3 per cent in India, from 5.4 per cent to 4.6 in Indonesia, and from 9.8 per cent to 5.1 in Turkey. Negative growth was observed in Argentina, Kazakhstan and Peru,” the report said.

Continuing, the UNDP report said among African countries, manufacturing output rose in Senegal by 3.8 per cent in the second quarter after a poor performance earlier in the year. It also rose in Cote d’Ivoire, Egypt and Morocco.

However, the growth performance of two large economies in Africa – Nigeria and the Republic of South Africa – according to the report is poor. “Manufacturing output in Nigeria has negative growth while South Africa rose by merely 0.3 per cent,” it said.

The report also presents growth figures by manufacturing industry. The highest growth in the second quarter – at 8.2 per cent – was reported for pharmaceutical products. The production of computer, electronic and optical products rose by 8.2 per cent.

Positive growth worldwide was observed in the production of essential consumer goods, such as food, beverages and wearing apparel. At the same time, the production of tobacco products fell in industrialised and other developing economies, although it rose significantly – at the rate of 5.9 per cent – in China.

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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