Global manufacturing likely to decline this year, says UN report

Workers assembling electronic goods in Indonesia

1 September 2011 – World manufacturing output is expected to be lower this year than last year, despite high growth rates in developing countries, says a new United Nations report released today.

A quarterly report issued by the UN Industrial Development Organization (UNIDO) states that world manufacturing output rose by 5.2 per cent in the second quarter of 2011, compared to 7.4 per cent in the first quarter.

If this trend continues, the overall growth of manufacturing value added (MVA) this year is expected to be 5.2 per cent, which is slightly lower than in 2010, according to the Vienna-based agency.

The report also notes that developing countries have maintained higher growth rates of manufacturing production, increasing by 11.1 per cent, and their MVA is expected to grow by 8.4 per cent this year.

China is the major contribution to this growth, with an output that increased by 14.3 per cent in the second quarter compared to the same period of 2010.

Higher growth rates were also observed in Turkey and in Latin American countries such as Argentina, Chile and Peru. Meanwhile, the growth rates of other major developing economies such as Brazil, India and Mexico slowed in the second quarter and remained below 5 per cent.

The growth rate of the United States, the world’s largest manufacturer, dropped to 4.4 per cent in the second quarter from almost 7 per cent in the first quarter. Manufacturing output growth rates also fell in France, Italy and the United Kingdom, while Germany maintained high growth of 9.4 per cent in the second quarter.

The report also contains the growth estimates for the second quarter by major manufacturing sectors. Production of basic consumer items such as food products, apparel and footwear remained high in developing countries, while there was a significant rise in the production of general machinery and office equipment in industrialized countries.

The production of motor vehicles, meanwhile, fell significantly due to the severe decline of this industry in Japan.


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