Contact: Joseph Walker, Interact Analysis, UK
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FOR IMMEDIATE RELEASE: 19th May 2020
Most countries will surpass 2019 levels of manufacturing production by 2024, as world emerges from COVID-19 – Interact Analysis
- Global manufacturing output predicted to be down by 7.6% in 2020; but most countries will exceed 2019 levels of production by 2024
- Transportation-related sectors (aerospace, automotive and commercial) likely to be the worst hit; food and beverage sectors the least
- US, UK, Italy, India & Brazil to be the worst affected; Korea and China the least
London, UK, 19th May 2020 – Interact Analysis’s latest update to its Manufacturing Industry Output Tracker (MIO) forecasts a steady but varied recovery for global manufacturing, notwithstanding the fact that some sectors have been hit harder than others during the COVID-19 crisis. Most countries will have surpassed 2019 levels of manufacturing output by 2024. Some as early as 2022.
In January 2020, Interact Analysis predicted the start of a gradual short-term rise in global manufacturing output, after relatively lean years in 2018 and 2019. This was based on various historical measurements and forward-looking indicators. COVID-19 has completely changed that outlook, as the global economy has been disrupted in a way never seen before. There have seen significant downturns in the past, notably in 2009, but this MIO update shows that, though the current economic situation looks disastrous, the crisis happened when basic market fundamentals for many economies were sound, and so recovery, though slow, will be sustained.
Interact Analysis’s research predicts a global pandemic-induced contraction of 7.6% in 2020. This is not as severe as the 8.6% contraction experienced in 2009, but it is close. To inform post-COVID-19 forecasts, the MIO has considered two key factors: which industries were most impacted by the virus, and how effective each country has been in controlling the virus and minimizing disruption.
Transportation industries have been the most severely affected, and they are predicted to remain below 2019 levels of productivity until beyond 2024. The disruption to airlines will have a long-term negative effect on the industry, as it did after 9/11, and the automotive industry will be hit by widespread unemployment, diminishing disposable income and the ability of consumers to purchase new vehicles. The food and beverage sector, on the other hand, is unlikely to slow down over the next 5 years. While not a sector that achieves high growth rates, it has stability due to constant demand, and tends to ride out downturns.
The timescale for manufacturing in individual countries to recover will largely depend on how effectively those countries handled the pandemic, and how badly they were affected. Interact Analysis expects the most affected regions, such as the US, the UK and Italy to see a slower recovery in 2021, which will intensify in 2022. In countries such as Korea and China, where the virus has seemingly been effectively controlled, a significant recovery as soon as 2021 is expected. Germany, however, is likely to be an exception to the rule. Widely praised for its effectiveness in controlling the virus, its manufacturing base has a heavy reliance on exports, which will be severely hit as worldwide economies contract, and to make matters worse, Germany’s automotive sector makes up one fifth of the country’s industrial output. Of all the major world economies, Germany’s is the only one forecast by Interact Analysis to have a 2024 manufacturing output lower than in 2019.
Adrian Lloyd, CEO of Interact Analysis says: “This MIO report update is informed by our analysts on the ground in countries across the world, and is a forensic analysis of the short- and long-term prospects of 16 key manufacturing sectors in 37 of the largest economies, as efforts are made to recover from the global shock of COVID-19. In these turbulent times, as the situation is so fluid, and requires constant re-analysis we are providing continual updates to clients. In recognition of the unprecedented situation manufacturers currently find themselves in, and reflecting Interact Analysis’s desire to play a part in aiding recovery, we are offering our latest MIO quarterly deliverable free of charge.”
About the MIO
The Manufacturing Industry Outlook tracker offers the most complete and unified analysis of the manufacturing industry globally. It quantifies the total value of manufacturing production with deep granularity for over 35 industries and machinery sectors, across 36 countries; presenting 10+ years of historical data alongside a credible five-year forecast. Country data from across the globe has been carefully organised around a common taxonomy to provide easy-to-interrogate, like-for-like comparisons. The historical data reveals the relationship between industry and machinery production for a complete business cycle, going back from pre-recession to the present day. Understanding these complex correlations, alongside current country and industry projections, provides a more accurate forecast by country, industry and machinery sector. To learn more, visit: https://www.interactanalysis.com/manufacturing-industry-outlook-mio/
About Interact Analysis
Interact Analysis is an international provider of market research for the Intelligent Automation sector. Our 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. To learn more, visit www.interactanalysis.com