Global manufacturing only contracts 3.9% in 2020, says Interact Analysis

Feb. 23, 2021
The lower than expected contraction is driven by 1.9% growth in China, which the group had previously forecast would have a 4% contraction

The quarterly update to the Interact Analysis' Manufacturing Industry Output (MIO) Tracker reveals strong overall global manufacturing performance. According to the market research organization, this is an unexpected upward revision on the previous MIO updates. Interact Analysis had forecast a -4% contraction in industrial output for China. But the country’s suppression of the virus meant that production was back on track by May 2020, allowing the country to post 1.9% growth.

Still, China is among the four global loss-leaders along with India, Japan and the United States, which have racked up in excess of $200 billion in lost MIO potential. Korea’s track-and-trace strategy has been effective says Interact Analysis. Also it has seen strong growth in the electronics and components sectors resulting in negative growth of only -2.4% for 2020.

Interact Analysis also found that Germany’s economy has suffered and predicts that recovery will be sluggish. The organization says that Germany's reliance on export markets in the automotive and metals sectors—which have both fared badly in the pandemic—are leading causes.

The machine tools sector has been hit by the major slow-down in the transportation industries. In Germany, machine tools is down 30% and this is reflected in weak performance in other European countries too, such as the United Kingdom where Interact Analysis also predicts the machine tools market to be down more than 30%. It expects 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%, -13.9% and -13.4% respectively. 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 $49.6 billion in 2020 to $53.4 billion in 2021.