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China emerges stronger and more productive
Chinese manufacturers , which delivered 31 percent of global output in 2022 , encountered Covid-19 earlier and experienced lockdowns for longer than those in most other countries . After double-digit growth in preceding years , productivity declined by one percent in 2019 , recovered in 2020 and soared by 27 percent in 2021 .
Output growth slowed to one percent in 2022 , and local sources suggest growth of seven percent in 2023 . Despite two million fewer workers in the sector , Chinese manufacturers are 39 percent more productive now than in 2019 and up 42 percent on a per-worker basis .
Commentators credit this to higher-value activities , technology , and smarter working practices .
US productivity is up eight percent , manufacturers increase
In the US , output fell five percent in 2020 before growing 12 percent in 2021 . The World Bank hasn ’ t shared US data beyond this , but local sources suggest manufacturers boosted output by another four percent in 2022 .
US producers relied more heavily on recruitment to boost output . The Bureau of Labor Statistics reported 12.7 million US manufacturing workers in 2022 , 500,000 more than in 2020 .
We estimate US manufacturing productivity is eight percent ahead of where it was in 2019 , and up six percent per employee , driven in part by policy changes that incentivized companies to re-shore manufacturing .
Productivity is challenged in Europe , some major markets are below pre-pandemic levels
In 2020 and 2021 , manufacturers in EU countries experienced a similar collective performance to the US . What followed was different . EU manufacturing output fell by three percent in 2022 and local data indicates a further decline in 2023 .
Production in Germany and France – two of Europe ’ s biggest manufacturing nations – is currently below pre-pandemic levels . When World Bank data becomes available for 2023 , we anticipate it will show EU output five percent ahead of where it was in 2019 , with employment increasing at the same rate ,
Despite the gloom , some countries have achieved double-digit gains in productivity since 2019 . They include Ireland , where 2022 manufacturing output was 61 percent above 2019 levels and increasing far faster than the corresponding workforce .
Some suggest the presence of many multinationals skew this figure , but we know Irish pharmaceutical and technology producers have achieved significant output gains in particular , and the Irish government is supporting efforts to accelerate technology adoption in manufacturing .
UK manufacturers buck slowdown , achieve productivity boom in 2023
Between 2019 and 2022 , manufacturers in the UK experienced almost identical pressures and output patterns to their continental counterparts .
However , where EU figures suggest productivity declined in 2023 , data from the UK ’ s Office of National Statistics indicate manufacturers here boosted productivity by seven percent , despite a reduced workforce . Producers here finished 2023 around ten percent more productive than in 2019 and 14 percent more per worker .
Some insiders credit Brexit for this . Less able to hire to increase production with people , manufacturers have more recently moved faster to boost output through automation and tools such as data analytics .
The pandemic and what followed caused many to rethink their priorities , and
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