World manufacturing production already indicated an overall economic slowdown in 2019 but, in the first quarter of 2020, manufacturing output growth registered a sharp decline of 6.0 per cent. This decline is attributable to China’s lockdown to contain the spread of COVID-19, as well as ongoing uncertainties due to restrictions on trade between the US and China and the so-called Brexit.
A massive decline of manufacturing output for industrialized, as well as developing and emerging industrial economies (excluding China), is expected in the following period as a large number of industrialized countries partially shut down their economies as a containment strategy for COVID-19 from March 2020 onwards.
In the first quarter of 2020, industrialized economies registered a contraction in manufacturing output of 2.5 per cent. Among Asian industrialized economies, manufacturing output remained almost unchanged, mainly due to the solid performance of South Korea and Taiwan, ROC.
In Europe, manufacturing growth was much lower in Eurozone economies compared to other European Union (EU) countries, as already experienced in previous quarters. Italy registered one of the steepest output declines of 11 per cent because of the early outbreak of COVID-19. Among non-EU economies, manufacturing output dropped by 6.0 per cent in the United Kingdom, mainly due to Brexit and related uncertainties.
China’s manufacturing output in the first quarter of 2020 was hit hard by the pandemic and dropped by 14.1 per cent in a year-over-year comparison. Almost all Chinese industries experienced negative growth rates, including motor vehicles (27.3 per cent) and textiles (22.5 per cent).
Manufacturing production in developing and emerging industrial economies (excluding China), not yet affected by COVID-19, recorded a reduction of 1.8 per cent.
Developing economies in the Asia and the Pacific region registered a negative year-over-year growth rate of 2.5 per cent for the first quarter. Viet Nam was among very few countries in the region that maintained a high manufacturing growth, whereas India’s manufacturing output further dropped.
The upcoming economic crisis due to COVID-19 is expected to further weaken economies in the Latin America region which already witnessed a reduction in manufacturing output of 2.8 per cent in year-on-year comparison.
Africa’s manufacturing output indicated a slight increase of 0.2 per cent for the first quarter of 2020.
The full report World Manufacturing Production, Quarter 1, 2020 is available here.