Global Economy Performance and Manufacturing Industry Growth Prospects (The US, China, Germany, Japan, South Korea)

Global Economy Performance and Manufacturing Industry Growth Prospects (The US, China, Germany, Japan, South Korea)

Executive Summary 

The global economy has expanded on an average at the rate of 3.4%, between 2014 to 2019 nevertheless in 2020 sudden lockdown all around the world and the cease of economic activities, the Global economy contracted to -3.3% which was worst ever since 1970. Although the economy bounced back in 2021 with growth of 5.8%. The recovery is still gradual due to the uncertainty revolving around covid, the war between Russia and Ukraine and as well as the soaring relationship between the US and China. South Asia remains the region with high GDP growth and is set to increase by 6.6 % in 2022 and by 6.3% in 2023 according to latest South Asian Economic Focus. Moreover, the global economy is estimated to grow at 2.7% in 2022-2023.

COVID-19 Impact over Global Manufacturing Industry: The availability of raw materials was a concern for the producers of automobiles, chemicals, electronics, and aircraft as a result of the global epidemics. In the electronics industry, the outbreak, which in turn disrupted the supply of components, has caused smartphone and consumer electronics companies to start reducing production operations and delaying the introduction of new products. According to global manufacturing association the manufacturers of have gone through a shipment delay of at least 5 weeks from the suppliers owing to the pandemic. The negative impacts on manufactures resulted in shipping delays from China and other leading suppliers.

Impact of Russia-Ukraine War: Vegetable oil is a crucial part of nutritious components; the outbreak of war has affected its availability and production. Due to shortages brought on by the war crisis, the price of these vegetable oils has increased, making it difficult for many people to purchase. Additionally, it has sparked countermeasures from trade and biofuel regulations, raising prices. The oil contains a variety of vitamins and nutrients, including Omega 3, Omega 6, Vitamins A, E, and K, all of which are crucial for a balanced diet. However, the danger of increased food prices has caused some to lose access to vegetable oil.

Global Manufacturing Industry Overview: The global manufacturing sector is the backbone of the global economy and currently accounts of approximately 16% of the global GDP and 14% to the total employment. However, the manufacturing sector's relative size in an economy varies with its stage of development.  The manufacturing sector is essential for all types of economy, developed or developing economies. The manufacturing sector has changed with respect to opportunities and challenges and neither business leaders nor policy makers can rely on old responses in the new and dynamic manufacturing environment. The major manufacturing industries are Automotive industry, Electronics industry, Food and beverages industry, Pharma industry, Agrochemicals Industry, Textile and apparel industry.

Manufacturing Industry Performance by Key Geographies 
China Manufacturing Industry: China is continuing its momentum in being the world’s largest vehicle market both in terms of annual sales and manufacturing output, with the domestic production expected to reach 35 million vehicles by 2025. Over 25 million vehicles were sold in the year 2020, which included 19.99 million passenger vehicles, down by 6.5% as compared to 2019. The sales for commercial vehicles reached to 5.23 million units which was an increase by 20% as compared to 2019, as per the report of Ministry of Industry and Information Technology. 

United States Manufacturing Industry: In the US, manufacturing is a vital industry. After the People Republic of China and the European Union, the US ranks third in the world for manufacturing, with a record-breaking real output of USD 2.34 trillion in 2020. According to estimates of US manufacturing association, output produced in the US accounts for 40% of the value of imports from Mexico, this percentage is 25% for Canada and only 4% for China. The integrated nature of the supply chains between the US, Mexico, and Canada in the NAFTA region is demonstrated by this production sharing. 

Germany Manufacturing Industry: Germany has managed to maintain a strong and consistent performance in manufacturing. The sizeable contribution manufacturing makes to the national economy. With a focus on the Ruhr region, Germany is one of the biggest producers of steel worldwide.  Machine manufacturing, auto manufacturing, electrical engineering and electronics, and chemicals are among Germany's leading industries. By 2025, 84% of German manufacturers intend to invest EUR 10 billion annually into smart manufacturing technologies. This sum includes the automotive industry, which will invest approximately 1.2 billion annually.

South Korea Manufacturing Industry: In the economic growth and stable employment throughout the COVID crisis, the nation’s manufacturing industry played a pillar role. After the manufacturing industry’s contribution to economic growth plummeted to -1.6% in the second quarter of last year, it was -0.2% in the third quarter and 0% in the fourth quarter. The economy has the second highest share of manufacturing. Out of 28 major economies, South Korea ranked 4th in terms of growth rate reduction as compared to 2019. Before the crisis, South Korea ranked sixth among 28 countries in terms of increase in the unemployment rate. 

Japan Manufacturing Industry: Japan’s manufacturing industry is a key driving force to its economy. The manufacturing sector is responsible for 90% of the country’s exports and is expanding with digitalization and adoption of AI. The industry, led by automobile and many others has played a significant role in making the Japanese economy the third largest in terms of GDP and contributed 19.75% of the total GDP in FY 2019 – 2020 according to the world bank collection of development indexes. 

Scope of the Study
The following synopsis is based on the report "Global Economy Performance and Manufacturing Industry Growth Prospect (The US, China, Germany, Japan, South Korea) " published by Makreo Research and Consulting. The report delves deeply into various parameters such as manufacturing industry performance, major countries and growth prospects. The study includes market dynamics that provide an understanding of industry opportunities, driving forces, major challenges impeding growth, and an analysis of future opportunities that may help market players capitalise on untapped business potential in the specific geography.

Global Manufacturing Industry Structure
Major Manufacturing Industries Shortlisted by Demand
Automotive
Electronics
IT Manufacturing
Textile & Apparel
Pharmaceutical
Agrochemicals
By Region
China
Automobile
Electronics
Semiconductor
Apparel & Textile
Medical Equipment
United States
Chemical
Automobile
Aerospace
Germany
Automobile
Electronics
Semiconductor
Steel
South Korea
Automobile
Electronics
Semiconductor
Steel
Japan
Automobile
Consumer Electronics
Chemical
Machine Tool
Semiconductor

The report helps reader to gain information on following areas:

How global manufacturing industry has fared in the past and what is the present situation of the industry?
What are the key industries having strong contribution in trade?
What are the key geographies worldwide known as manufacturing hub?
How US manufacturing industry is performing and what are the key industries in the country?
How China manufacturing industry has performed in the past and what the present state of the industry?
What is the role of Japan manufacturing industry in the global economy and what is the present state?
How Germany is contributing to the global economy with its manufacturing industry?
What is the performance of South Korea manufacturing sector?
What are the key economic parameters and how these factors are influencing the global economy?
What impact did Russia-Ukraine war left over the global economy?