NAM: Global Manufacturing Economic Update
According to seasonally adjusted data from the U.S. Department of Commerce, U.S.-manufactured goods exports totaled $1,171.37 billion in 2020, dropping roughly 14.21% from $1,365.33 billion in 2019 to the lowest level since 2010. Among the top 10 markets for U.S.-manufactured goods, China (our third largest market) was the only market with increased activity in 2020, with exports up 2.17%.
The U.S. trade deficit declined from $69.01 billion in November, an all-time high, to $66.61 billion in December, with the increase in goods exports outstripping the gain in goods imports. Overall, trade volumes were notably lower in 2020 as COVID-19 and a recession battered the global economy.
The International Monetary Fund predicts that the world GDP will grow by 5.5% in 2021, bouncing back after declining 3.5% in 2020. The increase reflected “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.”
The J.P. Morgan Global Manufacturing PMI that the world GDP will grow by 5.5% in 2021, bouncing back after declining 3.5% in 2020. The increase reflected “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.
In January, eight of the top 10 markets for U.S.-manufactured goods had expanding manufacturing sectors, the same number as in December. Japan and Mexico continue to be challenged, with the former slipping back into contraction territory in January after being neutral in December.
The data continue to reflect significant progress in the global economy, particularly relative to last spring. Yet, six of the 10 markets had slowing growth in January. This largely reflected renewed weaknesses in the services sector in some areas, particularly in Europe, where COVID-19 cases continue to rise. (The Eurozone economy contracted by 0.7% in the fourth quarter.) In addition, respondents continue to cite disruptions in their supply chains.
The Chinese economy grew 6.5% year-over-year in the fourth quarter, the fastest rate in two years. In December, industrial production increased 7.3% year-over-year, up from 7.0% in November and the strongest pace since March 2019.
Since April 24, 2020, the U.S. dollar has fallen 9.6% against a broad-based index of currencies for goods and services, according to the Federal Reserve. However, it has trended slightly higher since January 21, 2021, up 1.0%.
Manufacturers are working robustly with the Biden administration and Congress to open markets, ensure trade certainty and address challenges overseas, taking actions that include the following:
Continuing to monitor the U.S.–China security, trade and economic relationship, and stressing the need for a comprehensive and strategic U.S. approach on China
Pressing for continued efforts to promote innovation and protect intellectual property globally
Underscoring that a revitalized and modernized World Trade Organization is vital for manufacturers in America
Successfully urging the Biden administration to maintain a fully functional Export-Import Bank
Working closely with the Biden administration on the effective use of the Defense Production Act
Applauding U.S. global leadership on COVID-19 and global health by restoring U.S. membership at the World Health Organization and committing to lead the push for reform
Continuing to lead industry advocacy in support of congressional passage of a comprehensive Miscellaneous Tariff Bill
Urging Canadian Prime Minister Justin Trudeau to address concerns with proposed regulations on plastic manufactured items