Economia globaleProspettive > Current trends of worldwide industrial production

Five structural changes

 

1. shorter sequence of economic crises since 2000

2. deeper crises

3. longer crisis overcoming

4. galloping national indebtedness

5. instead of an upward business trend non-uniform crisis overcoming with coexisting of growth, stagnation and setback of industrial production producing a stagnant total tendency.


Worldwide industrial production in 2021 H1

In the first half of 2021, industrial production in industrialized countries still in crisis, predominantly growth in BRIC and MIST countries

Symbolbild Weltwirtschaft

The worldwide industrial production is highlighted by four reports. This report quarterly investigated the situation of the worldwide industrial production and its outlook. A report deals with structural changes in the course of the industrial production, a report highlights the time from the outbreak of the world economic crisis to 2020 and finally a report shows the structurally changed process of the crisis overcoming.

October 21st, 2021The selected countries absorb 82% of machine exports from Germany. These are the three country groups industrialized countries (European Union, the USA, and Japan), BRIC countries (Brazil, Russia, India, China) and MIST countries (Mexico, Indonesia, South Korea and Turkey). The trend analysis is based on the five structural changes in the course of industrial production sinde 2000. These keywords are listed on the left side.

Ups and downs in the first half of 2021 - industrial production in industrialized countries still in crisis

Symbol picture industrialized countries.

The group of industrialized countries takes 60% of the German machine exports.


The crisis-like decline in industrial production in the industrialized countries in 2020 is highlighted by a corresponding trend report in the magazine.


In the first quarter of 2021 (blue-shaded area in the chart), industrial production rises again. In the second quarter, the increase weakens again.

Industrial production in the industrialized countries from 2008 to 2021.

The last high of 2019 or 2018 was not reached in the first half of the year. In the first half of 2021, industrial production in the industrialized countries under review remains in crisis.


The trend report up to 2020 sheds light on the background to this crisis-like development. This consists of the continuing stagnation in industrial growth in the industrialized countries after the global economic crisis was overcome.


After the crisis was overcome, industrial production in the USA grew by only 0.6% p.a., in Germany by 0.4% p.a., in the EU by 0.8% p.a. and in Japan industrial production fell by 0.2% p.a.. This is detailed in the Trend Report up to 2020.

Industrial production in the BRIC countries grows predominantly

Symbol picture BRIC countries.

he BRIC countries absorb 15% of machinery exports from Germany.


China's industrial production has been on a roller coaster since the beginning of 2020, as the report on quarterly industrial production shows. The strong increase in the first quarter of 2021 was preceded by a drop in industrial production in 2020. In the second quarter, industrial production falls again.


In the first half of the year, China's industrial production exceeds the 2020 level and is therefore not in crisis.


The same applies to Russia, whose industrial production exceeds the level of 2019.

Industrial production in the BRIC countries from 2008 to 2021.

Industrial production in Brazil is also experiencing ups and downs. In the first half of the year, it is slightly above the level of 2019 and is thus part of the stagnation that has prevailed since 2016.


The slight growth of the BRIC countries in the first half of 2021 (no data for India is available from the OECD for 2021) is based on the development after the global economic crisis of 2008/2009. As the trend report in this magazine states
   

  • China's industrial production grew by 9% per year until 2019   
  • India's by 3.4% per year and Russia's by 2% per year   
  • Brazil's industrial production fell by 1.7% annually.

Growing industrial production of the MIST countries in first half year 2021

Symbol picture MIST countries.

Industrial production in MIST countries with 6% share of machinery export grows in the first half of 2021.
 

  • Indonesia's industrial production decreased in 2020, is above the last high of 2019 in the first half of 2021.

  • After three years of stagnation and decline, Turkey's industrial production grows significantly in the first half of the year.

  • South Korea's industrial production is also growing again after two years of stagnation.

  • Mexico's industrial production stagnated in 2017, and the OECD has not provided figures on Mexico since then.
Industrial production in Mexico, Indonesia, South Korea und Turkey (MIST) from 2008 to 2021.

Outlook for 2021

The process of overcoming the last global economic crisis of 2008/2009 led to a global mishmash of growth, stagnation and decline in industrial production.


The galloping public debt to stimulate demand drove debt levels to peaks that could no longer be repaid by economic means. These gigantic amounts of money pumped into circulation were not able to initiate new economic upswings.


A new world economic crisis with declines in industrial production has already developed in the industrialized countries in 2019, partly already in 2018 and extended in 2020. The pandemic dramatically exacerbated this development in 2020, but did not primarily cause it.


The outlook for 2021 is therefore very likely to be dominated by a global economic crisis.


Added to this is a major political factor. The U.S. government's "America first" policy is aimed at maintaining the U.S.'s unchallenged world position as number one by all means. This policy sees China as its main competitor for its leading world position.


Therefore, the current political situation in the world is characterized by a reorganization and restructuring of the previous spheres of power and influence in favor of the USA or in favor of China. The USA will use all its means to limit China as a competitor in all fields.


The economic effects of this approach will lead to a block formation of the world economy, thus further constricting it. This reinforces the decline and stagnation of global industrial production for 2021 and beyond.

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