ASSOCIATION WATCH Edited by Mike Santora • Associate Editor
NFPA’s Global Market Report Update NFPA’s Global Market Reports and Forecasts are a collection of monthly and quarterly global market reports that will allow readers to investigate
U.S. highlights •
every angle of the global marketplace. Prepared by Oxford Economics, these reports are an exclusive benefit for all NFPA members. Non-members are encouraged to join NFPA
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to access the full reports. Highlights are below.
Global highlights •
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The rapid spread of the coronavirus, and the associated isolation policies implemented to contain the outbreak, has led to a significant disruption in economic activity. Services activity has seen the brunt of the impact, but manufacturing has also been hit. Global manufacturing output is expected to remain weak in Q2 before a swift rebound is seen in the second half of this year as the spread of the virus slows and isolation restrictions are eased, leading to the release of pent-up demand as business confidence increases. The oil market is still reeling from a severe demand and supply shock. For now, we assume that oil prices remain low enough for long enough to force significant cutbacks in U.S. production.
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Industrial production (manufacturing, extraction, and utilities) is forecast to lag economic growth in 2020, falling by 2.3%, picking up to 5.2% growth in 2021. Manufacturing output is expected to contract 2.7% in 2020, driven by a decline in the motor vehicles and parts sector. In 2021. Manufacturing output is forecast at 6.1% growth, again driven by growth in the motor vehicles & parts sector. Extraction output is expected to fall 1% in 2020, driven by a decline in the non-fuel extraction activities sector. Next year, extraction output is forecast at 1.1%, driven by the oil and natural gas extraction sector. Construction output is expected to increase by 0.5% in 2020 and 3.6% in 2021. The service sector is expected to expand 0.2% in 2020, driven by growth in the healthcare and social work sector. In 2021, service sector output growth is forecast at 3.9%, driven by growth in the other business services sector. The value of industrial production in 2019 was US$3,055.6bn at 2015 prices. Within this, the largest sectors were utilities (US$322.2bn), food (US$279.4bn) and chemicals excluding pharmaceuticals (US$231.7bn). Over the next decade industrial production is projected to remain broadly stable as a share of GDP, and fall as a share of global output, as growth in developed economies is forecast to lag that of the emerging markets. The fastest growing industrial sectors over the next decade are expected to be high-tech goods, pharmaceuticals and other transport equipment. The slowest growing sectors are expected to be wearing apparel and furs, leather goods and textiles. FPW
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