Fashion
According to the IMF’s World Economic outlook, the global economic climate is becoming increasingly brighter. For example, global growth of 6% is now projected for 2021, with this incrementally higher than the previous forecast offered in October last year,
However, the nature of the global coronavirus recovery is a little more complex, with some sectors of the economy faring considerably better than others across the globe.
In this post, we’ll take a look at the world’s industrial production output, casting our eyes over the dominant Eurozone and US regions.
Appraising Disappointing Production in the Eurozone
We’ll start in the Eurozone, where industrial production in Germany showcased a lesser-than-expected rebound in March.
This is according to the official data published by Eurostat, which suggests that the recovery within the region’s manufacturing sector remains mired in doubt and negative growth.
Broker analysts noted that the industrial output for the bloc was measured at just 0.1% month-on-month in March, against an expected 0.7% increase that was forecast for the same period.
On an annualised basis, the industrial output soared by 10.9%, although once again this was pitted directly against a four-week forecast of 11.7%. So, although the green shoots of growth can be seen in the most recent monthly data, it’s fair to say production in the Eurozone remains lower than even the most conservative forecasts.
Unsurprisingly, Germany’s disappointing production figures impacted directly on the bloc’s single currency, with the EUR/USD dropping by 0.13% to just 1.2130.
This price was further underpinned by broad-based and relative dollar strength and the upcoming US CPI data, which may reinforce recent losses in the near-term.
So, is the Global Recovery in Doubt?
Of course, the Eurozone figures should be viewed in the correct context, both in terms of the wider global perspective and the fact that growth is prevalent in Germany’s production figures.
After all, American industry appeared to rebound in March as the US recovered from its own unusually uncertain February. During this time, industrial production stateside (including output at factories, mines and utilities) increased by 1.4% overall, reversing a 2.6% decline in the previous month.
This casts the world’s manufacturing niche in a far more positive light, as does the fact that some individual stocks and sectors are expected to outperform global production rates in the wake of the coronavirus pandemic.
For example, the Spirax-Sarco group has projected growth rates above the increased forecast for global IP expansion, thanks largely to increased demand triggered by the Covid-19 pandemic.
More specifically, the group’s Watson-Marlow fluid technology subsidiary is expected to see 55% organic sales growth due to coronavirus-related demand, while the Electric Thermal Solutions brand ended 2020 with a much higher than normal order book.
This type of bullish trend is prevalent in various sectors and regions across the globe, and there’s no doubt that this will help to support worldwide industrial output through 2021 and beyond.
