Letter IEDI n. 1108—Asymmetries in the global industry recovery
According to UNIDO (United Nations Industrial Development Organization), the recovery of the global industry continued in the 2nd quarter of 2021, even though new COVID-19 outbreaks undermined dynamism in some countries, notably in the group of emerging economies.
World manufacturing output grew 0.3% in Q2'21 compared to the previous quarter, after seasonal adjustment. It was the fourth consecutive positive rate, but only 1/5 of that seen in Q1'21 (+1.5%).
Due to low bases of comparison (as the COVID-19 pandemic greatly compromised world industrial performance in Q2'20), the year-on-year growth rate was 18.2%, that is, a higher figure than the result of Q1'21 (+12.6%).
UNIDO shows that the slowdown in the pace of industrial growth from Q1'21 to Q2'21 was quite widespread. The only exception was the industry of the developed countries of North America, largely due to the USA. The figure for this region was 0.7% in Jan–Mar'21 and 0.8% in Apr–Jun'21 in relation to the immediately previous quarter, after discounting seasonal effects.
Even so, as a result of the loss of dynamism in other areas, the total set of developed countries saw its industrial performance recede from 1.7% to 0.7% between the first two quarters of 2021. The worst case was that of the developed countries of Asia, whose rate went from 3.6% to 0.8% in the period, that is, ¼ of what it was early in the year.
Developed countries in Europe, in turn, saw their growth rate fall by half: from 1.3% in Q1'21 to 0.6% in Q2'21, always in relation to the previous period and with seasonal adjustment.
Emerging and developing economies, except China, form the group with the most adverse evolution. As UNIDO points out, many of them experienced a new deterioration in the sanitary situation in Q2'21 and their access to vaccines against COVID-19 has been more heterogeneous, causing the process of immunization of their populations to be slow.
Thus, the 0.9% increase in Q1'21, which was already low and below the result of developed countries, gave way to a drop of 1.3% in Q2'21, further increasing the asymmetry of their industrial recovery in relation to the rest of the world. After three straight quarters of reaction, this was the first negative rate since the start of the COVID-19 crisis.
Latin America fell less than the group of emerging and developing countries as a whole, registering -1.2% in relation to the immediately previous quarter. IBGE data show, however, that the decline in Brazil reached -3% in Q2'21, seasonally adjusted. Africa and Asia, and the Pacific, in turn, showed more intense declines than that of Latin America, of -1.6% and -1.4%, respectively. Other emerging and developing nations managed to grow 0.6% in this comparison.
China is a case apart for being the first hit by COVID-19 and for having shown a consistent and quick recovery, with its manufacturing industry staring to grow again already in Q2'20. Even so, it registered some accommodation at the margin, with growth going from 1.4% in Q1'21 to 0.5% in Q2'21 against the previous quarter, seasonally adjusted.
Based on data from the national statistical institutes of the countries themselves, the OECD and Eurostat, the IEDI prepared an international ranking of total industrial output growth for several countries in the first half of 2021.
Among the 45 countries in the sample, Brazil occupied the 16th place, with an increase of 13.1% compared to the same period of the previous year, ahead of countries such as France, Japan, Germany and the USA. In Q1'21, Brazil was the 15th in the ranking.
UNIDO data also show that medium-high and high-tech industries (+21.8% compared to Q2'20) have been leading the growth of the manufacturing industry worldwide, not only in Q2'21, but also in the three previous quarters.
Among the prominent sectors are computers, electronics and optical products, machinery and equipment, and electrical equipment, as well as the pharmaceutical industry.