U.N.: European financial crisis slowing down global manufacturing

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The economic crisis in Europe could be slowing down global manufacturing output, according to a United Nations (UN) report released on Friday.

The report by the UN Industrial Development Organization (UNIDO) showed that global manufacturing output increased by only 4.2 percent in the fourth quarter of 2011, which compared to the same period in the previous year, marked the lowest quarterly growth rate for the year.

A positive start in 2011 seemed to indicate a recovery from the financial crisis of 2008-2009, but the rebound stalled in the second quarter, especially due to the deteriorating financial situation in the euro-zone countries.

The report also showed that for the first time after the financial crisis, the growth rate was below 10 percent in developing countries, as the main driver of overall growth last year in the region was seen in manufacturing in the transport and automotive industry.

While trends in industrialized countries were mixed, overall growth in industrialized countries was estimated merely at 2 percent for the fourth quarter.

The impact of the financial instability could be seen both inside and outside the euro zone, with manufacturing production falling in the United Kingdom and Switzerland. Greece saw a 14 percent manufacturing decline in the fourth quarter.

In Spain manufacturing output fell by 4.6 percent, in Portugal by 3.6 percent decline, and Italy by a 2.6 percent. However, a number of European countries showed a growing manufacturing sector as well. Among them were Germany's 3.7 percent growth, Austria's 3.3 percent growth, Belgium's 4.6 percent growth and France's 2.1 percent growth.

High manufacturing growth was recorded in the Czech Republic with 5.2 percent and Poland with 9.6 percent, while Russia registered a 6.5 per cent production output. Smaller figures were seen in Finland, Ireland and the Netherlands, which all saw less than one percent.

Meanwhile, manufacturing output in the United States reflected further consolidation of the industrial sector with 4.3 percent growth in the fourth quarter, compared to the same period during the previous year.

Japan's manufacturing growth declined in the fourth quarter, although the manufacturing production of the Republic of Korea grew by 5.6 percent.

China had a robust manufacturing output growth to 13.1 percent, as the output in developing countries grew at a rate of 9.2 percent. Argentina had a 3.4 percent growth rate, while India's grew by 4.1 percent and Mexico's by 4.9 percent. In Brazil, output fell by 1.9 percent.

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