Global Manufacturing Output Returns to Pre-Covid Levels
Latest figures show manufacturing demand has continued to rise as more world economies begin to emerge from the coronavirus crisis. Global factory output and new orders rose in November at some of the fastest rates seen over the past decade as demand continued to revive from the COVID-19 related lockdowns earlier in the year.
Rob Dobson, Director at , which compiles the , said: “Growth of the UK manufacturing sector picked up in November, temporarily boosted by 'Brexit-buying' among clients and the ongoing boost from economies re-opening following lockdowns earlier in the year.
“The effects were strongest felt among firms supplying inputs to other companies as warehouses were restocked, and among producers of investment goods such as machinery and equipment. The weak point was the consumer goods industry, which saw lower output and new order intakes amid depressed household sentiment caused by mounting job losses and the UK re-entering lockdown.
“Whether the upturn of manufacturing production can be sustained into the new year is therefore highly uncertain, especially once the temporary boosts from Brexit purchasing and stock building wane. On this front, some reassurance is provided by the survey's gauge of business optimism.
“Confidence has risen to a level not seen since late-2014, with over three-fifths of manufacturers (61 per cent) still expecting to raise output over the coming year. On the other hand, many manufacturers remain very concerned about the outlook and generally reluctant to expand capacity, hence employment fell for the tenth month in a row.”
- UK manufacturing buoyed by Brexit-buying from firms preparing
- Ireland, Germany and USA all saw growth in its respective manufacturing sectors
- Many challenges still lay ahead, and key indicators are less than emphatic
Differing Regional Situations
Meanwhile, in mainland Europe, Germany's partial lockdown to contain the second wave of coronavirus slowed growth in the manufacturing sector in November. However, export-oriented companies remained optimistic thanks to strong demand from abroad, according to the PMI index. The manufacturing industry, which accounts for about a fifth of the German economy, fell to 57.8 in October from the two year high of 58.2 reached in the previous month. Any index figure above the 50-per cent threshold indicates growth.
The PMI survey chimes with high-frequency data such as Germany's truck toll mileage which has also suggested that the industrial sector is so far relatively unscathed by the second wave of the pandemic. Economic institutes nevertheless expect Germany's gross domestic product to shrink by up to 1 per cent in the fourth quarter after a stronger-than-expected 8.5 per cent rebound in the third and an unprecedented 9.8 per cent plunge in the second quarter.
The US manufacturing sector also continued to grow in November despite the coronavirus pandemic impacting employment, the ISM manufacturing index was at 57.5 per cent last month, slightly worse than expected but still above the 50-per cent threshold inferring growth. However, key indicators are slowing as the United States weathers the world's largest Covid-19 outbreak.
In Ireland, manufacturing growth accelerated during November after the sector was spared during the reintroduction of tough Covid-19 restrictions, its index number rose to 52.2, the third-highest reading since April 2019.
Canoo Awards Manufacturing Contract to VDL Nedcar
Canoo, a trailblazing company in the electric vehicle (EVs) manufacturing industry, has officially announced owned and contract manufacturing plans that will ensure the company manages to deliver on its promise to consumers of production and delivery of vehicles in Q4, 2022.
During the company’s first Investor Relations Day, Chairman & CEO of Canoo, Tony Aquila, named VDL Nedcar as its contract manufacturing partner. VDL Nedcar, which I’m sure many of you will already have heard of, is the only independent Vehicle Contract Manufacturer in the Netherlands and has enjoyed fifty years of growth under owners, including Mitsubishi Motors and Volvo cars. According to the report, Nedcar will manufacture the Lifestyle Vehicle for the United States and European Union markets, while Canoo builds a US-based mega micro-factory.
"We conducted an exhaustive search, invested significant amounts of time and resources that span the globe, in our search for our Phase 1 contract manufacturer. VDL Nedcar is the right partner," said Tony Aquila, Investor, Chairman and CEO of Canoo, Inc. "They are the top trusted European manufacturer building high-quality products for leading OEMs, and they significantly outcompeted the other contenders. VDL is also independently owned by the van der Leegte family of entrepreneurs - which aligns with our commitment to support businesses that form the backbone of communities. This strategic partnership will enable us to deliver vehicles to market while we build our Phase 2 factory in Oklahoma. It also strongly positions us for geographic expansion in Europe and builds a lasting relationship with VDL Groep of companies. Our investment will help us scale quickly and fulfil our mission to bring affordable, purpose-built EVs to Everyone."
Canoo and VDL have already gotten to work on vehicle manufacturability and production planning so that Canoo can successfully lay the groundwork for its upcoming US manufacturing operations expansion, which will be completed in Oklahoma in 2022. The Nedcar facility currently expected to produce around 1000 units for both the US and European markets in 2022, with an additional 15000 targeted for the following year.
"Canoo's bold approach to designing and building electric vehicles makes them an ideal partner as we work together to shape the future of mobility," said John van Soerland, CEO of VDL Nedcar. "This partnership advances our strategic vision to provide a contract manufacturing solution and expand our expertise in the EV arena."
Currently, Canoo is entering its GAMMA phase of development and is on track to start production soon. The company intends and expects to launch its Lifestyle Vehicle in Q4 2022, closely followed by the Multi-Purpose Delivery Vehicle and Pickup Truck.
Watch this space.