The UK, EU and the US see the largest growth in the manufacturing sector since 2018.
Since COVID-19 first hit the headlines last year, there is no doubt that it has had a significant negative impact on a number of industries across the world.
However, although Coronavirus cases are continuing to hit record daily highs in countries such as the United States, manufacturing sectors spread across key economies such as the UK, EU and US are experiencing considerable gains.
According to researchers at global Forex and contract for difference (CFD) broker Tickmill, after moving out of nationwide lockdowns, the euro zone, UK and US regions have experienced many positives in the manufacturing sectors despite the ongoing – and in some cases rising – numbers of COVID-related statistics.
The manufacturing sectors experiencing growth include computer and electronic products, plastics and rubber products, paper products, wood products, food, beverage and tobacco products, apparel, leather and allied products and furniture and related products – plus others.
Over the height of the pandemic, these three economies suffered from record crashes, but are now moving back into optimistic territory. So, just what movements have been seen in each of these regions?
From March until May, the majority of the US was shut down in an effort to contain COVID-19. Because of this, the country’s manufacturing index had fallen into recission territory. However, at the beginning of November, the Institute for Supply Management revealed that its manufacturing index had risen to a reading of 59.3% in October, which was up from 55.4% in September. Demand in areas such as home construction and auto sales have helped with the rebound, as has the gains in employment and inventories.
In the monthly report, it was also made evident that the engine that drives manufacturing, new orders, was up 7.7% on September’s figures. Chair of the ISM’s Manufacturing Business Survey Committee, Tim Fiore, stated: “The new orders number was very strong, and inventories are climbing up positively, too, which shows that people are optimistic and stocking up for the future”.
In the euro zone, there has also been growth. The PMI climbed to 54.8% in October, which was up from the 53.7% in September. Throughout this month, German factories saw record expansion in new orders. However, the recently imposed controls are now almost as strict as the lockdown of the first phase of the crisis, which could mean that some of the manufacturing activity might stop. Manufacturing activity in France also strengthened marginally, although the new lockdown there could also hit the sector soon.
According to the manufacturing Purchasing Managers’ Index (PMI) reports, it was also made clear that the UK had actually marked a decrease in its readings, which raised questions over the recovery in this region. Due to factors such as the UK being put back into a national lockdown as of 5th November, 2020, the UK has faced huge amounts of uncertainty, and this could be the reason for the weakening in statistics.