Contraction in global manufacturing output lower than expected at 3.9% in 2020
India, China, Japan, and the US have together racked up in excess of $ 200 billion in lost MIO (Manufacturing Industry Output) potential in 2020, says Interact Analysis report. Machine tools were the biggest casualties globally, while semiconductors and electronics machinery sector emerges virtually unscathed
The latest quarterly update to the Manufacturing Industry Output (MIO) Tracker from Interact Analysis reveals unexpectedly strong overall global manufacturing performance. This is an upward revision on the previous MIO updates. “At our most pessimistic point, we forecast a -4 per cent contraction in industrial output for China. But the country’s rigorous suppression of the virus meant that production was back on track by May 2020, and the region is now posting 1.9 per cent growth,” said Interact Analysis in a press release.
The Chinese recovery has had a significant impact on global growth, but it still represents considerable overall lost growth, putting China among the four global loss-leaders, along with India, Japan, and the USA, who have together racked up in excess of $ 200 billion in lost MIO potential. Korea’s track-and-trace strategy has been hugely effective, and the country has seen strong growth in the electronics and components sectors resulting in overall negative growth of only -2.4 per cent for 2020.
In Europe, Germany’s economy in particular has suffered, and recovery will be sluggish. Key factors here are the country’s huge reliance on export markets in Eastern Europe and globally, notably in the automotive and metals sectors which have both fared badly in the pandemic.
Where industrial machinery is concerned, one of the biggest casualties globally has been the machine tools sector, which has been hit hard by the major slow-down in the transportation industries. In Germany, machine tools sector is down 30 per cent and this is reflected in weak performance in other European countries too, such as the UK where Interact Analysis also predicts the machine tools market to be down over 30 per cent. And Europe is not alone: few of the major regions are likely to return to 2019 levels in the next 6 years.
COVID-19 has driven, and will continue to drive, the demand for plastic and rubber medical supplies and personal protective equipment. However, the rubber and plastics machinery sector did experience a decline in demand in 2020 with Korea, India and the UK seeing contractions of the order of -15.8 per cent, -13.9 per cent and -13.4 per cent respectively. However, all the top 10 regions are expected to recover to 2019 levels by 2023 at the latest. Strong APAC performance will bolster a growth that will see production values rise from $49.6bn in 2020 to $53.4bn in 2021.
Adrian Lloyd, CEO at Interact Analysis, says: “The Semiconductor and electronics machinery sector is one of the few sectors to have come through the pandemic untouched. Most major regions are forecast to grow past 2019 levels in 2020, with global growth forecast at 9.9 per cent. The few who don’t will be back up and running at a stronger level than 2019 by 2021. Growth will likely be slightly slower in 2022 and 2023 but will remain positive. APAC is the leading producer of semiconductor and electronics machinery. We forecast a 5-year CAGR for Korea of 9.1 per cent. It’s a good sector to be in. But some regions really need to play catch-up.”
Interact Analysis is an international provider of market research for the Intelligent Automation sector. Interact Analysis team of experienced industry analysts delivers research into three core sectors: industrial automation, robotics and warehouse automation, and commercial vehicles. Intelligent Automation – which is the integration of artificial intelligence and automation – will change virtually every industry imaginable. This combination enables greater efficiencies, productivity, convenience, and scale. It has the potential to drastically alter the outlook for many traditional industries such as manufacturing, healthcare and automotive as well as to lead to the emergence of entirely new industries.