Production output in Nigeria, others drop

Despite a sluggish growth in global manufacturing the first quarter of 2016 due to the fragile nature of the recovery process in industrialized economies, a quarterly report by the United Nations Industrial Development Organization (UNIDO) has shown that developing and emerging industrial economies contributed 90 per cent to the growth profile of the sector in the first quarter of 2016,

Indeed, the report showed that world manufacturing output grew by 2.1 per cent in the first quarter of 2016, compared to the same period of the previous year.

Specifically, manufacturing output growth was estimated at 0.3 per cent in industrialized economies, and 4.7 per cent in developing and industrial economies.

On the contrary, manufacturing output of Africa dropped by 1.1 per cent, as major economies suffered from low capital inflows and reduced exports.

In Nigeria, capacity utilization in the manufacturing sector has been on the decline with activities slowing down in the sector to below 50.69 per cent recorded in the second half of 2015.

With manufacturers still grappling with scarcity of foreign exchange to buy raw materials, amidst low consumer purchasing power and other challenges affecting the real sector, contributions to global manufacturing growth may have dropped further.

According to the UNIDO report, most of the growth of industrialized economies came from Europe, where manufacturing output rose by 2.3 per cent., while in East Asia, manufacturing production dropped by 2.9 per cent.

Eurozone economies, backed by falling energy prices and a cheaper Euro, have shown consistent growth, with the manufacturing output of Greece, Italy and Spain rising.

With the uncertainty created by a potential Brexit, the United Kingdom experienced a decline in manufacturing output, while output also dropped in oil-dependent economies such as Norway and the Russian Federation, by 6.4 and 3.4 per cent respectively.

The manufacturing output of China, which recently emerged as the world’s largest manufacturer, rose by 7.4 per cent in the first quarter.

The manufacturing output of Latin America, which has suffered from subdued global demand for commodities and falling oil prices, dropped by 3.3 per cent. One of the sharpest declines of 11.2 per cent was observed in Brazil.

Asian economies showed a higher growth performance with manufacturing output rising in Malaysia, Indonesia and Viet Nam, while India’s manufacturing output unexpectedly plunged by 2.2 per cent after a short-lived high growth period.

The UNIDO report also provides an insight on sectoral perspectives, as the worldwide production of tobacco products dropped by 3.4 per cent.

By contrast, production of pharmaceutical products rose by 4.8 per cent.

Industrialized economies maintained higher growth in the production of motor vehicles, pharmaceutical and chemical products.

Developing and emerging industrial economies maintained higher growth in wearing apparel, non-metallic mineral products, and consumer electronics.