Economia globaleProspettive > Growth rates of worldwide industrial production

Status of crisis overcoming eleven years afterwards

Growth rates of industrial production in countries absorbing 82% of Germany's machine exports

March 17th, 2020 - This report reveals the growth rates resp. change rates of global industrial production. Why industrial production in particular? It is the most important economic indicator for the machinery industry and automation technology.  


This report considers countries that accounted for 82% of all machinery exports from Germany in 2019. These are the EU, the USA and Japan (61%), the BRIC countries Brazil, Russia, India and China (16%) as well as the MIST countries Mexico, Indonesia, South Korea and Turkey (5%).

The annual growth rates of the industrialized countries since the overcoming of the global economic crisis reaching from minus 0.1% to 1.1%

The analysis puts the OECD data to industrial production at 100 for the pre-crisis year 2008, so that the change rates since that time are immediately clear and comparable.  


The following diagram shows at a glance that industrial production in Germany has risen by 3.1% since 2008, in the USA by 8.6%, in the EU by 0.8% and has decreased in Japan by 10% since then.

The course of industrial production in the USA, Germany, the EU and Japan from 2008 to 2019.

Let us differentiate further and identify the year in which the countries concerned had overcome their crisis trough. And growth rates will only be determined from this point until end of 2019.

Growth rates of industrial production of Germany, the US, EU and Japan 2008 - 2019.

The annual growth rates of industrial production after the crisis are for Germany 0.3% since 2011, for the EU 0.1% since 2011, for the USA 1.2% since 2013 and for Japan minus 0.1% since 2010.

From a stagnating or only slightly growing trend in the industrial countries to a crisis

These figures do not document an economic upswing that used to be the norm after crises. Rather, the economic and crisis cycle of industrial production in the industrialized countries has changed structurally since 2000, as this magazine has shown.  


Instead of a previously usual economic upswing after crises, an uneven, sluggish overcoming of the crisis has taken place, in which growth, stagnation and setbacks coexist and produce a stagnating or by 2018 only slightly growing overall trend.  


In 2019, industrial production in Germany, the EU and Japan is in crisis, as the chart shows.

The annual growth rates of the BRIC countries document growth and setback in a range from 9.0% to -1.7%

China's industrial production has increased by a factor of one half since 2008, while that of the US has risen by only almost 9%. This gap is a major cause of the Trump government's aggressive policy toward China in particular. It is about containing China for reasons of competition and the USA's desire to remain the world power number one.

The industrial production in Brazil, Russia, India and China (BRIC countries) from 2008 to 2019.

The annual growth rates of industrial production in India and Russia, at 3.4% and 2.0% respectively, are more than twice as high as in the USA with 1.1%.

Growth rates of industrial production in Brazil, Russia, India and China (BRIC) 2008 - 2019.

Brazil's industrial production shrinked by 1.7% per year since 2010.

The annual growth rates of the MIST countries range from 1.7% to 6.4% per year

The chart shows that since 2008 industrial production in Turkey grew by 66%, in Indonesia by 61%, in South Korea by 33% and in Mexico by 17% (2017).

The industrial production in Mexico, Indonesia, South Korea and Turkey (MIST countries) from 2008 to 2019.

Turkey leads the annual growth rates of the MIST countries with 5.6% since 2010, followed by Indonesia with 4.4% since 2008, and South Korea with 1.5% since 2010. For Mexico 2.3% p.a. from 2011 to 2017 can be provided due to missing data from the OECD.

Growth rates of industrial production of Mexico, Indonesia, South Korea nd Turkey from 2008 to 2019.

The galloping indebtedness of state, companies and consumers in the US

The galloping national debt has revealed this magazine as the fourth structural change. In the US it has reached 105% of the GDP. 


The level of debt of the private sector, i.e. companies (banks excluded) and households is at 150% of the GDP in third quarter of 2019 as the FED graph below indicates.

Private debts in the US from 1980 to 2019.
Source: Federal Reserve Bank of St. Louis, March 16, 2020, www.fred.stlouisfed.org

Debts make it possible to buy now and pay later. Of course, the development of industrial production benefits both from credit-financed purchase of its products and from its credit-financed modernisation and expansion.


Today's enormously increased production possibilities with the help of state-of-the-art technology apparently cannot be absorbed without credit-financed demand. If payments of the purchases today cannot be covered by payments tomorrow due to overindebtedness, the credit chain will crack, a money crisis will break out and production tailored to credit-financed levels will choke on its own oversize - in the form of a world economic crisis.

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