Quarterly Report, Q4 2023

World Manufacturing Production

Signs of accelerated dynamism

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Original: ENGLISH.
 World Manufacturing Production
Highlights Q4 2023

Global and regional manufacturing

Global index of manufacturing production Year-on-year growth rate of global manufacturing production
125 30

Per cent
Index 2015 = 100

20
120

10
115
0
110
-10

105 -20
2020 2021 2022 2023 2020 2021 2022 2023
100 -30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Industrial economies Industrializing economies

Manufacturing of industrializing economies

1.5%
year-over-year growth rate of
global production, pointing
(2.6%) experienced the lowest growth since
to an accelerated dynamism. 2020,but still exceeded the performance of
industrial economies (1.4%).

Sectoral trends
Global index of manufacturing production by technology level Manufacturing industries with best/worst global performance
140 Motor vehicles
Index 2015 = 100

Other transport equipment

130 Computers and electronics
Basic metals
Chemicals
120

Leather products
110 Other non-metallic
mineral products
Furniture
100 Printing
2020 2021 2022 2023 Wearing apparel
90
-5 0 5 10
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Medium-high and high technology industries Other manufacturing industries Year-over-year growth rate, per cent

Higher-tech industries continue reporting

Ongoing high production increases of
notable inter-annual growth:
motor vehicles and other transport
Medium-high and high tech: 3.9% equipment, while many low-tech sectors
Other manufacturing industries: 0.1% struggle with reduced output.
 1
Global and regional manufacturing
growth

Global manufacturing output registered a moderate increase of 1.5

per cent during the last quarter of 2023 compared to the same period
of 2022 (Figure 1.1). Compared to the previous quarter, the manufac-
turing sector grew by 1.0 per cent, which could indicate that global
manufacturing production is entering a more dynamic phase, after the
stagnant growth registered since the second half of 2022. 1.5%
year-over-year growth rate of
Retrospectively, several challenges strongly influenced the manufac-
turing sector during 2023. These challenges included a high rate of
global manufacturing
production
global inflation that led to subdued demand, persistent supply chain
disruptions and the ramifications of regional conflicts. Additionally, an
insufficient supply of highly qualified workforce in certain industries
and increasingly frequent natural disasters, whose effects are already
affecting production today, will require a coordinated and sustainable
response from global leaders.
Index (2015 = 100)

125

120

115

110

105

100

95

Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
2015 2016 2017 2018 2019 2020 2021 2022 2023

Figure 1.1 | Index of global manufacturing production

 1 Global and regional manufacturing growth 3

World Africa Asia & Oceania

5.0
Per cent

3.4

2.5
1.5

0.0

-0.7
-2.5

Latin America
Europe Northern America
and the Caribbean
5.0

2.5

0.0
-0.5
-1.3 -1.5
-2.5
Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4
2022 2023 2022 2023 2022 2023

Figure 1.2 | Year-over-year growth rate of regional manufacturing output

During the fourth quarter of 2023, the manufacturing sector in most

regions continued to face production losses. The region of Asia and
Oceania, which achieved the best regional performance with a man-
ufacturing expansion of 3.4 per cent, remained the only exception.
In contrast, output in Africa and Northern America shrank by 0.7 per
cent and 0.5 per cent, respectively, compared to the previous year. Eu-
rope as well as Latin America and the Caribbean suffered contractions
greater than one per cent (Figure 1.2).

Manufacturing in Asia and Oceania recorded the highest growth rate

of all regions not only in inter-annual (year-over-year) terms, but also
in a quarterly comparison (see Annex Table A.1). China, the region’s
main engine given its dynamism and high share in regional output,
Asia and Oceania
again achieved
reported a growth rate of 4.9 per cent compared to the same quarter of the highest
2022. When comparing to the previous quarter, China’s manufacturing performance among main
sector increased by 1.9 per cent. The manufacturing performance of geographical regions
other countries with a significant contribution to this region’s output
diverged. On one hand, the output of India, Indonesia and the Republic
of Korea expanded by more than 4.0 per cent in annual comparison.
On the other hand, Japan (-0.3 per cent), Taiwan Province of China (-2.4
per cent) and Thailand (-4.7 per cent) suffered significant production
cuts.
 1 Global and regional manufacturing growth 4

In the fourth quarter of 2023, European manufacturing production

decreased annually by 1.3 per cent, while it grew moderately by 1.2
per cent compared to the previous quarter. The countries of this re-
gion followed different growth paths. For example, Germany (-3.8 per
cent), Italy (-2.4 per cent) and Switzerland (-2.1 per cent) were facing
strong inter-annual production cuts, while output in Denmark (10.0
per cent), Greece (5.6 per cent) and the United Kingdom (1.6 per cent)
experienced growth of varying magnitude.

Manufacturing output in Latin America and the Caribbean dropped

again in the fourth quarter of 2023, with a growth rate of -1.5 per cent.
Among the biggest Latin American economies, production in Argentina Manufacturing in
and Mexico declined by 5.8 per cent and 0.8 per cent, respectively. most regions
recorded significant
Brazil’s output, on the other hand, stagnated in annual comparison.
Northern America reported an output reduction by 0.5 per cent in
output drops
in Q4 2023, but with high
the current quarter, corresponding to the performance of the United intra-region variability
States of America, while Canada’s output remained almost flat (-0.1
per cent).

Limited data on Africa revealed another quarter of shrinking man-

ufacturing output (-0.7 per cent) during the fourth quarter of 2023.
The growth patterns of the different countries diverge to a significant
degree: Nigeria (1.5 per cent) and South Africa (1.7 per cent), for exam-
ple, remained in positive territory, while Senegal (-5.5 per cent) and
Tunisia (-0.6 per cent) recorded output reductions.

Figure 1.3 | Year-over-year growth rate of manufacturing output by region

 Findings by country groups 2
2.1 Industrial economies

After a subdued production growth of 0.4 per cent in the previous

quarter, the pace of the manufacturing sector of industrial economies
accelerated again in the fourth quarter of 2023, with an expansion
of 1.4 per cent (Figure 2.1). Using the previous quarter as a reference
point, the group also grew moderately by 1.0 per cent, following several
quarters with stalled production.
Industrial economies
In detail, the economies of this group continued to show diverse currently account for

growth patterns. Belarus, Costa Rica, the Russian Federation and Sri 91% of global
manufacturing output
Lanka increased their production by more than 7 per cent. Furthermore,
a positive growth was recorded in Australia, the Philippines and Türkiye.
On the other hand, manufacturing output in Colombia, Israel, the
Netherlands and Viet Nam declined by at least 5 per cent.

All industrial economies Middle-income industrial economies (excl. China)

China High-income industrial economies

180
Index (2015 = 100)

160

140

120

100

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2021 2022 2023

Figure 2.1 | Index of manufacturing production of industrial economies

 2 Findings by country groups 6

Disaggregated data show declining manufacturing activity in high-

income industrial economies for each quarter of 2023, leading to a
year-over-year decrease of 0.9 per cent for the most recent quarter, as
shown in 2.1. At the same time, the group of middle-income industrial
economies (including China) reached an output increase of 3.7 per
cent (Figure 2.2). The manufacturing production of this group follows
closely the trajectory of China, due to this country’s large share in the
output of this group. In Q4 2023 China’s
manufacturing sector
Other middle-income industrial economies reported subdued man- improved annually by 4.9%
ufacturing growth of 0.3 per cent, although with a significant inter- and by 1.9 per cent
country variability. A few countries grew at a dynamic pace, such as compared to last quarter
Costa Rica and Sri Lanka, both registering an increase of 7.5 per cent,
while others contracted at a significant rate (Bulgaria -8.4 per cent,
Jordan -3.7 per cent, Peru -8.2 per cent and Thailand -4.7 per cent).

Middle-income industrial economies (incl. China) Middle-income industrial economies (excl. China)
China
40
Per cent

20

-20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2021 2022 2023

Figure 2.2 | Year-over-year growth of manufacturing output in middle-income industrial regions

 2 Findings by country groups 7

2.2 Other industrializing economies

This group accounts for a lower share of global manufacturing pro-

duction. Although heterogeneous, the countries in this group would
benefit considerably from a stronger industrial sector and a shift to
industries with higher productivity and technological intensity.

Overall, this group registered a year-over-year output increase of 2.6

per cent in the fourth quarter of 2023, which is significantly above the
growth achieved by the group of industrial economies. This is mostly
attributable to a loss of dynamism in industrial economies across
most geographical regions.
Industrializing
A closer look at specific subgroups (Figure 2.3) reveals more detailed economies have

insights. Output in high-income industrializing economies achieved outperformed

growth of 2.1 per cent in annual comparison, overcoming a deceler- industrial economies
for several quarters
ation registered since the beginning of 2023. While its production
in average grew by around 10 per cent in 2022, this value dropped
to 5 per cent in 2023. Production in middle-income industrializing
economies grew by 2.7 per cent, while output in low-income econo-
mies increased by a remarkable 7.0 per cent, after several quarters of
stalled or even decreasing output.

All industrializing economies Middle-income industrializing economies

High-income industrializing economies Low-income economies

140
Index (2015 = 100)

130

120

110

100

90

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2021 2022 2023

Figure 2.3 | Index of manufacturing production of other industrializing economies

 2 Findings by country groups 8

2.3 Emerging industrial economies

Emerging industrial economies are a special group of low- and middle-

income economies whose manufacturing sector has demonstrated
significant dynamism in recent years. In addition to several industrial
economies, the group also includes industrializing economies that,
although still at earlier stages of industrial development, have shown
strong manufacturing growth.
Emerging industrial
The manufacturing output of this group has indeed shown a compar- economies are characterized by

atively positive performance, being significantly ahead of the world sustained spells
average as well as the average of industrial economies. In the fourth of manufacturing

quarter of this year, it expanded by 4.6 per cent, following a growth of value added growth
4.2 per cent in the previous quarter, as depicted in Figure 2.4.

Emerging industrial economies Industrial economies Other industrializing economies

30
Per cent

20

10

-10

-20

-30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2021 2022 2023

Figure 2.4 | Year-over-year growth rates of manufacturing output in emerging industrial economies and other selected country
groups

Year-over-year growth rates of

manufacturing output of selected
On a country analysis, the manufacturing sectors of China, India and
emerging industrial economies
Indonesia reported annual increases beyond 4 per cent, while Malaysia
(-0.2 per cent) and Rwanda (-1.6 per cent) reported decreases of a • India (5.0%)
moderate level. On the contrary, Viet Nam’s manufacturing sector (-7.4 • China (4.9%)
per cent) suffered another loss, which could indicate a normalization • Indonesia (4.2%)
after the exceptionally high growth recorded in 2022, averaging almost • Malaysia (-0.2%)
• Rwanda (-1.6%)
20 per cent.
• Viet Nam (-7.4%)
 Findings by industry groups 3
The latest global trends in industrial sectors grouped by technolog-
ical intensity are shown in Figure 3.1. The data reveal that higher-
technology industries swiftly recovered from the pandemic-driven
disruptions of the past years and remained robust and even thrived
amidst many challenges.
Output of
On average, industries classified as medium-high and high technology higher-technology
(MHT) continued outperforming other manufacturing sectors and grew industries keeps
at an impressive annual rate of 3.9 per cent in the fourth quarter of expanding
2023. Other manufacturing industries remained almost flat, with a despite global challenges

marginal increase of only 0.1 per cent.

Medium-high and high tech Other manufacturing industries

Index (2015 = 100)

140

130

120

110

100

90
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
2015 2016 2017 2018 2019 2020 2021 2022 2023

Figure 3.1 | Global index of manufacturing production, industries by technology level

The performance of higher technology industries benefited from the

ongoing strong production in the automotive (9.0 per cent) and trans-
port (6.7 per cent) sectors as well as in the manufacturing of computers
Manufacturing of
and electronics (6.6 per cent). These sectors reported the best perfor-
pharmaceuticals is
mance among MHT sectors on an annual basis (Figure 3.2). Conversely, confronted with a
production of pharmaceuticals dropped by 2.0 per cent, following a volatile trajectory
volatile trajectory observed since the beginning of 2022. Furthermore, since 2022
machinery dropped by 2.5 per cent in the current quarter, a decline of
similar magnitude than the outcome in the previous quarter.
 3 Findings by industry groups 10

Medium-high and high tech Other manufacturing industries

29 Motor vehicles
30 Other transport equipment
26 Computers and electronics
24 Basic metals
20 Chemicals
19 Coke and refined petroleum products
27 Electrical equipment
33 Repair and installation of machinery
25 Fabricated metals
22 Rubber and plastics
10 Food products
17 Paper products
12 Tobacco products
32 Other manufacturing
13 Textiles
11 Beverages
21 Pharmaceuticals
16 Wood and cork products
28 Machinery
15 Leather products
23 Other non-metallic mineral products
31 Furniture
18 Printing
14 Wearing apparel

-5 0 5 10
Per cent

Figure 3.2 | Performance of manufacturing industries by technological intensity, year-over-year growth rate, Q4 2023

The automotive sector has recorded high annual growth rates for six
consecutive quarters. Nevertheless, in the fourth quarter of 2023, pro- Main producers of motor vehicles
(inter–annual growth in Q3 2023)
duction decreased by 0.3 per cent compared to the previous quarter,
which could be a sign of a slowdown in this sector. Analyzing country- 1. China (16.6%)
level production data, major car producers continued reporting output 2. United States (0.7%)
increases, but with varying magnitude. The transition toward electric 3. Japan (14.5%)
4. Germany (1.6%)
engines and other emerging technologies, together with the gradual
5. Republic of Korea (3.6%)
reduction of emission levels, are considerable global challenges; how 6. Mexico (4.1%)
these changes are overcome will determine the near-future trends in 7. United Kingdom (26.0%)
this sector. 8. India (13.9%)
9. France (3.8%)
The performance of industries differed across country groups (Fig- 10. Indonesia (-2.5%)
ure 3.3). Overall, industrial economies recorded large increases in
higher-technology sectors, with few exceptions, but suffered produc-
tion losses in many lower-technology industries.
 3 Findings by industry groups 11

Other industrializing economies, on the other hand, showed a two-digit

expansion of the pharmaceutical production, with Denmark contribut-
ing significantly to this result. In addition, industrializing economies
have further boosted the manufacture of motor vehicles and other
transport equipment as well as electrical equipment.

Medium-high and high tech Other manufacturing industries

Industrial economies Other industrializing economies

29 Motor vehicles
30 Other transport equipment
26 Computers and electronics
24 Basic metals
20 Chemicals
19 Coke and refined petroleum products
27 Electrical equipment
33 Repair and installation of machinery
25 Fabricated metals
22 Rubber and plastics
10 Food products
17 Paper products
12 Tobacco products
32 Other manufacturing
13 Textiles
11 Beverages
21 Pharmaceuticals
16 Wood and cork products
28 Machinery
15 Leather products
23 Other non-metallic mineral products
31 Furniture
18 Printing
14 Wearing apparel

-10 0 10 20 -10 0 10 20
Per cent

Figure 3.3 | Performance of manufacturing industries by technological intensity and country groups,
year-over-year growth rates, Q4 2023
Note: Industries are ordered according to world growth rate (see Figure 3.2)
A Main indicators

The table below presents a summary of the main indicators for the current quarter. Additional data
tables with further details on recent trends by regions, country groups and industrial sectors can be
downloaded here. The complete dataset of quarterly indices of industrial production can be accessed in
UNIDO’s Quarterly IIP database.

Table A.1 | Main indicators of manufacturing output by regions and industrial groups, Q4 2023

Growth Growth
compared to compared to
Share in world previous same period of
MVA (2015, Index quarter previous year
percentage) (2015=100) (percentage) (percentage)
Development groups
World 100.0 124.1 1.0 1.5
Industrial economies 93.1 123.9 1.0 1.4
Industrializing economies 6.9 126.9 0.3 2.6
Regions
Africa 1.9 108.2 -0.1 -0.7
Asia & Oceania 50.8 141.1 1.5 3.4
Europe 22.7 112.7 1.2 -1.3
Latin America and the Caribbean 5.4 105.3 -0.4 -1.5
Northern America 19.3 99.7 -0.5 -0.5
Industrial economies
High-income industrial 53.4 105.4 0.8 -0.9
Middle-income industrial (excl. China) 12.7 118.1 -0.3 0.3
China 27.0 163.3 1.9 4.9
Industrializing economies
High-income industrializing 1.9 118.0 2.6 2.1
Middle-income industrializing 5.0 130.2 -0.4 2.7
Low-income 0.1 126.7 0.1 7.0
B Data sources and methodological notes

This report presents observed growth rates and estimates of world

manufacturing production for the fourth quarter of 2023, as well as
revised estimates for the third quarter of 2023. The figures are based
on indices of industrial production (IIP) collected by UNIDO Statistics
from national data sources. Currently, quarterly IIPs are available for
117 countries, corresponding to 97.2 per cent of global manufacturing IIP measures
the growth of the
value added (MVA). As shown in Figure B.1, major data gaps are still
industrial production
present, mostly in Africa and some subregions of Asia and Oceania.
in volume terms, free
from price fluctations
IIP measures the growth of the volume of industrial production in
real terms, independently from price fluctuations. Users should take
note that while annual industrial growth rates from national accounts
generally refer to changes in MVA, i.e. output net of intermediate
consumption, quarterly IIPs reflect the growth of gross output. Given
UNIDO’s IIP time series are
the temporal nature of estimates, output growth provides the best
seasonally adjusted
approximation of value added growth, assuming that the input-output for seasonal- and
relationship remains stable during the observation period. calendar-related effects

UNIDO has published quarterly reports on world manufacturing since

2011. The data compilation and presentation methods are regularly
updated. Since 2013, growth figures have been published based on
seasonally adjusted index numbers. Since 2017, seasonal adjustments
have been made using the TRAMO/SEATS ð method in the JDemetra+ ð TRAMO stands for Time series Re-
software. The purpose of seasonal adjustments is to filter out periodic gression with ARIMA noise, Missing val-
ues and Outliers, and SEATS for Sig-
fluctuations or calendar effects within time series. The individual pa-
nal Extraction in ARIMA Time Series.
rameters of the seasonal adjustment procedure for each time series ARIMA is the abbreviation of Autore-
are subject to regular revisions, normally at the beginning of each new gressive Integrated Moving Average, a
reference year. Major economic uncertainties or other unusual events, widely applied statistical method for
time series analysis.
such as the global pandemic of 2020, require frequent reviews of the
underlying models based on the most recent available information.

The present report implements revision 4 of the International Standard

for Industrial Classification of All Economic Activitiesð (ISIC Rev.4). ð United Nations. International
For countries that publish monthly/quarterly indices based on ISIC Standard Industrial Classification of
All Economic Activities (ISIC), Rev.4.
Rev.4, national data are used in their original form. For countries that
United Nations, 2008, p. 308.
still produce index numbers based on ISIC Rev.3, growth figures are
estimated at the two-digit level of Rev.4 using correspondence tables.
In both cases, data on index numbers are derived from national sta-
tistical sources. In case of missing data, UNIDO conducts imputations.
 B Data sources and methodological notes 14

These estimates are replaced as soon as the officially reported values

become available in national statistical publications.

This report refers to country groups in terms of economic territories International Yearbook
rather than political boundaries. Economies are classified according of Industrial Statistics
to a combination of their stage of industrialization (industrial or in- 2023
dustrializing) and income level (high income, middle income and low
income). This classification is particularly useful for presenting growth
estimates by country aggregates at different levels of structural trans-
formation. In addition, the report includes information on the group of
emerging industrial economies, which includes the most dynamic eco-
nomies within both industrial and industrializing economies. Finally,
regional groups based on the M49 classification are also presented. A
comparative picture of growth trends in different parts of the world is
provided based on these country groups. The full list of economies
in the country groupings is available in the International Yearbook of
Industrial Statistics 2023.

Growth rates are calculated from the national index numbers aggre-
gated to the given country group or geographical region using weights
based on the countries’ contribution to world MVA. Since the first quar-
ter of 2020, the base year has been adjusted to 2015 in accordance
with other UNIDO publications.

Users can find further information on the methodology of index num-

Data featured in this
bers, estimation procedures and a compilation of country groups’ report can be accessed at
indices in a methodological document that is available on the statisti- UNIDO Statistics
cal pages of UNIDO’s website. The indices themselves are published data portal
in UNIDO’s Quarterly IIP database, available on the UNIDO Statistics
Data Portal. Since 2020, UNIDO also publishes monthly data on world
manufacturing production with regular updates.

Figure B.1 | Data availability of quarterly IIP indices

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