Germany led the charge in global factory output for the end of 2020 as global levels continued climbing at some of the fastest rates in the last ten years as demand surged to more than supply and logistics could handle, according to the latest PMI research data released by IHS Markit.
Photo: Siemens
The research hints at a potential for recovery from the coronavirus pandemic which oversaw a significant downturn for the first half of the year.
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IHS Markit reports that business confidence has increased with production levels, but faced slight stagnation owing to a resurgence in levels in November with employment remaining steady as job losses and general company caution were offset by capacity increases and new openings across the globe.
The firm's global manufacturing PMI came in at 53.8 for December, continuing the trend set by November's 33-month high, although the data reveals that the output and new order indices shrunk from the month prior.
November saw global production rates increase to their highest level since February 2011, with December seeing a slight moderation of these numbers. The data shows that the final six months of 2020 saw continual growth in output, particularly when compared to the sharp contraction present from February to June owing to the pandemic's effect on productivity and workforces.
The research suggests that Europe - led by Germany - clocked in first place for production output for December, overtaking the prior few months' output leader, Brazil, for the final month of 2020.
A November report from the Federal Statistical Office of Germany showed that September saw German industry's first employee numbers rise for 2020, matching up to the overall growth shown for the end of the year.
However, IHS Markit added that Germany saw some of the sharpest declines for the final few months of the year in comparison to its production growth, coming in just behind the losses encountered in countries such as the Philippines and Mexico.
Chris Williams, the author of the report states: "The sustained buoyancy of future output expectations, further robust order book growth in December and shortages of operating capacity (as indicated by rising backlogs of work) all contributed to higher workforce numbers at some firms in December, though many other firms remained either reticent to hire amid the ongoing pandemic or even cut headcounts in order to minimise costs.
"The net result was no overall change in worldwide staffing levels after a marginal gain in November, though this represents a welcome improvement on the continual drop in employment seen over the prior 11 months."
The UK, Ireland and the Netherlands also saw above-average global growth, however, expansion in these countries - particularly in the UK - were mainly caused by pre-Brexit stockpiling, according to the analysts.
Also in Europe, a significant resurgence in cases of coronavirus caused a strain on the demand for products, which was only exacerbated by the existing supply issues owing to disrupted supply chains following complications from the initial shock of coronavirus.
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One major complaint present throughout most of global manufacturing was the absence of viable shipping lanes and capacity around the world, including a shortage of containers and frequent bottlenecks as suppliers struggled to meet the demand from manufacturers.
Representatives from the shipping industry have previously commented that the effects of Covid-19 have created a "perfect storm" for reduced capacity failing to meet with rising demand.
The initial rollout of vaccines has shaped an optimistic future for the industry, despite slight contractions in numbers owing to the threats of more lockdowns as the year drew to a close.
The UK has already seen the rollout of two vaccines, with the EU and US expected to follow suit shortly. The Pfizer vaccine has also been distributed to China, hinting at a global trend towards mass inoculation within the next few years.
The US has also seen a buoyancy increase owing to the result of the 2020 presidential election, which saw former Vice President Joe Biden elected as the nation's 46th president, pending his inauguration on January 20.
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