The declining trend of manufacturing output seems to have been reversed but prospect of recovery remains fragile due to the prolonged recession in Europe, the United Nations today reported.
World manufacturing output grew by 1.7 per cent in the first quarter of 2013, up from 1.3 per cent at the end of 2012, according to the United Nations Industrial Development Organization (UNIDO).
“The recovery of industrialized economies has been jeopardized by stagnation in Europe due to austerity measures,” the report’s authors noted, adding that the large number of unemployed will remain that way for the foreseeable future.
Manufacturing output in France fell by 4.2 percent, in Germany by 1.7 percent, in Italy by 4.5 percent, in the Russian Federation by 3.1 percent and in the United Kingdom by 2.1 percent, according to data cited in the report. Positive growth in Europe was maintained by a few smaller economies, including Austria, Estonia and Denmark.
Negative growth was observed in Japan in the first quarter but showed signs of rebound with a 2.0 per cent growth on a quarter-to-quarter basis. The falling exchange rate of the Japanese Yen against other currencies is expected to reduce the price of Japanese goods abroad which in turn may increase exports, the report predicted.
The base of the current growth is limited to the United States and China only, the world’s leading manufacturers. In the United States, figures systematically rose in 2012 and the first quarter of 2013. The most impressive growth, based on information in the report, in machinery and equipment, electrical appliances and the manufacture of motor vehicles.
Meanwhile, China’s output grew by 9.7 per cent, slightly down from 10.0 per cent in the previous quarter. This high growth accounts for more than half of the manufacturing output of developing and emerging industrial economies. The main reason for the lower rate of growth has been a fall in exports to industrialized countries, and low capital inflow to developing countries in return.
The UNIDO report also contains the growth estimates for the first quarter by major manufacturing sectors.