The latest data from the United Nations Industrial Development Organization (UNIDO) indicate more robust growth in global manufacturing in the fourth quarter of 2024, driven by acceleration in China and other Asian countries. From a sectoral perspective, high-technology industries continued to stand out.

In Q4’24, global manufacturing output grew 1.0% compared to the previous quarter, with seasonal adjustments, accelerating from the 0.6% recorded in Q3’24.

Compared to the same period in the previous year, also with seasonal adjustments, the performance was 2.8%, the best quarter of 2024 and the strongest growth since mid-2022. As a result, global manufacturing expanded 2.3% in 2024, nearly double the 1.2% recorded in 2023.

It is worth noting that Brazil outperformed the global aggregate for most of the year. Over the four quarters, Brazilian manufacturing production grew 3.2%, but signs of a slowdown in the final months of 2024, as discussed in Letter IEDI No. 1301, created a divergence with global industry.

While global manufacturing output accelerated from 0.6% to 1.0%, as mentioned above, Brazil’s production went from 1.4% to -0.1% from Q3 to Q4’24, compared to the previous period and with seasonal adjustments.

Domestic factors, such as rising interest rates in Brazil and uncertainties regarding the fiscal balance, played a significant role in explaining this divergence. However, the strong performance of Chinese industry in the last quarter of the year, driven by exports and industrial policy measures, also contributed to the global aggregate’s result.

Given the evidence of trade diversion in international markets, there is a direct relationship between the export-driven advance of Chinese industry and the slowdown of Brazilian industry, exemplified by the competitive pressure in the global steel market.

In China, manufacturing maintained a resilient growth pace throughout 2024, around 1.5% per quarter, accelerating to 1.9% in Q4’24, against the previous period with seasonal adjustments. Compared to the same quarter in 2023, growth started at 5.1% in Jan–Mar’24 and ended at 6.6% in Oct–Dec’24.

The rest of Asia followed a similar path. It is worth noting that increasing trade barriers to Chinese exports and national strategies to attract investment have boosted industrial activity in other countries in the region.

After near stagnation in Q3’24, Asia and Oceania (excluding China) recorded 1.3% growth in Oct–Dec’24 compared to the previous period, and growth rose from 1.7% to 2.3% compared to the year before.

All other regions showed no signs of improvement at the end of 2024. Compared to Q3’24, Europe (-0.2%), North America (-0.4%), Latin America and the Caribbean (+0.1%), and Africa (+0.5%) lost momentum and remained close to stability. Compared to Q4’23, Europe (-0.4%) and North America (-0.6%) returned to negative territory.

In North America, both the United States and Canada contributed to the decline in the last quarter of 2024. In Europe, the most significant negative influences came from Germany, France, and Italy. In all these cases, there were declines compared to both the third quarter of 2024 and the fourth quarter of 2023.

In Latin America and the Caribbean, the loss of momentum was driven by Brazil, as previously mentioned, but not exclusively. Mexican manufacturing fell 1.2% from Q3 to Q4’24, more than offsetting the production increase in Argentina (+2.7%), which recorded its second consecutive positive variation.

Based on UNIDO’s database, the IEDI periodically constructs a ranking of industrial production performance, highlighting Brazil’s position. The sample in this Letter IEDI includes 82 countries, based on the availability of information for Q4’24.

Among these countries, comparing Q4’24 to the same period in 2023, Brazil ranked 26th. The industrial slowdown at the end of the year caused Brazil to drop six positions compared to its ranking in Q3’24 (20th).

Nevertheless, Brazil ranked ahead of other prominent Latin American countries, such as Chile (+2.4%) in 31st place, Argentina (0.0%) in 46th, Colombia (-0.2%) in 51st, and Mexico (-0.4%) in 55th.

Furthermore, Brazil performed significantly better than in the last quarter of 2023, when it ranked 38th among the same 82 countries with the most recent data available.

For the full year of 2024, when Brazilian manufacturing grew 3.2% with seasonal adjustments, Brazil’s position in the ranking was 25th, a substantial improvement compared to 2023, when the country ranked 45th due to a 1.0% decline in manufacturing output.

The full text is available in Portuguese