UNIDO  Headquarters

Crusoe Osagie

The United Nations Industrial Development Organization (UNIDO) has reported a decline in the growth of the manufacturing sector in Nigeria and other developing countries.

It stressed that manufacturing output in these countries dropped to the lowest level since the beginning of 2011.

According to it, while the manufacturing industry in developing economies largely resisted the effects of financial volatility during the recession of 2008–2009, the ongoing second recession of the world economy since 2010 has equally affected both industrialised and developing countries. It predicted that the growth of manufacturing value added (MVA) in developing countries will slow further to 4.5 per cent in 2012, down from 5.4 per cent in 2011.

Among the industrialised countries, there are positive developments in North America and East Asia. The MVA of North America is expected to grow by 1.7 per cent in 2012, while East Asia’s industrial production could grow by 4.1 per cent. However, there are concerns that the impact of declining MVA in Europe may spill over to these regions. Prolonged instability in the Euro-zone countries has caused negative spill over in other European countries, and manufacturing output has fallen in Croatia, Denmark, the Russian Federation, Sweden, and the United Kingdom. The MVA of European countries as a group is expected to decline by 1.7 per cent in 2012.

The prolonged crisis in Europe and uncertainty about growth prospects in the US has negatively affected industrial production in developing countries. The decline in demand in external markets has slowed the growth of export-oriented manufacturing industries in many developing countries, and, in some of them, domestic demand, too, has dropped due to the perceived growth uncertainty at the global level.

During the second quarter of 2012, manufacturing growth slowed throughout the developing world. China’s growth rate declined to 9.5 per cent compared to 12.7 per cent in the first quarter. In Brazil, industrial production dropped by 4.8 per cent, and in India, by 0.7 per cent. Among other developing economies, manufacturing output dropped in Argentina, Colombia and Peru.

Negative growth was also observed in developing countries in North Africa. In Egypt, manufacturing output fell sharply, by 9.6 per cent, and in Tunisia, by 7.5 per cent.
The UNIDO report also presents growth estimates by manufacturing sector. Due to the decline in demand in industrialised countries, production growth of consumer goods, especially wearing apparel and consumer electronics, have slowed or declined in developing countries.