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5 Trends Defining The Future of Manufacturing
5 Trends Defining The Future of Manufacturing
Euromonitor International
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OVERVIEW
OVERVIEW OF ECONOMIC TRENDS
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OVERVIEW OF ECONOMIC TRENDS 5
0.0
-1.0 World 3.0
-4.8
-2.0
-3.0 USA 1.7
-5.0
-4.0 1.4
Advanced Economies -6.3
-5.0
-6.0 Eurozone -8.8 1.1
Nov
Apr
Aug
Sep
Oct
Feb
Sep
Jan
Dec
Mar
May
Jul
Jun
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OVERVIEW OF ECONOMIC TRENDS 6
80 100
60 80
% of GDP
% of GDP
60
40
40
20
20
0
2008 2009 2010 2019 2020 2021 0
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OVERVIEW OF ECONOMIC TRENDS 7
5.00
China, 1.87
0.00
Lithuania, -4.20 Norway, -4.72
Real GDP growth, %
USA, -9.54
-10.00 Brazil, -11.44
Canada, -14.02
South Africa, -11.62
-15.00 Hungary, -13.60
Malaysia, -17.07
-20.00
Mexico, -18.84
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OVERVIEW OF ECONOMIC TRENDS 8
4.0
St.d. above/below long-term average
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
Jan 2019 Apr 2019 Jul 2019 Oct 2019 Jan 2020 Apr 2020 Jul 2020
115
110 ▪ No additional global waves of
105 the pandemic
100
95 ▪ Social distancing effects
90 subside until the end of 2020
85
80 ▪ Vaccine developed by mid-
2019 2020 2021 2022 2023 2024 2025 2021
Pre-C19 forecast C19 Baseline
Source: Euromonitor International Macro model
▪ Probability – 48%
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OVERVIEW OF ECONOMIC TRENDS 10
4.0
Vietnam, 2.5
2.0 Egypt, 1.0
0.0
Sweden, -4.5
-4.0 USA, -5.0
Chile, -6.0
-6.0
-16.0
Africa and Middle East Asia Pacific Eastern Europe Latin America North America Western Europe
Source: Euromonitor International Macro model
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OVERVIEW OF ECONOMIC TRENDS 11
115.00
110.00
105.00
100.00
95.00
90.00
85.00
2019 2020 2021 2022 2023 2024 2025
Western Europe Asia Pacific Eastern Europe Latin America Africa and Middle East North America
Source: Euromonitor International Macro model
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OVERVIEW OF ECONOMIC TRENDS 12
Top 5 Least Affected Countries under the Top 5 Most Affected Countries under the
Baseline: 2019-2025 Baseline: 2019-2025
140.00 105.00
135.00 103.00
130.00 101.00
99.00
125.00
97.00
120.00
95.00
115.00
93.00
110.00
91.00
105.00 89.00
100.00 87.00
95.00 85.00
2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025
Vietnam China Indonesia Pakistan Egypt Italy United Kingdom Mexico Spain Argentina
Source: Euromonitor International Macro model Source: Euromonitor International Macro model
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Our view in short C19 Pessimistic1:
Global GDP growth of
Global Real GDP Index, Baseline and Alternative Scenarios: 2019-2025 -5.3% in 2020 and 0.7% in
125 2021
120
Index, Real GDP 2019=100
115
110 ▪ Global second wave of the
105 pandemic at the end of 2020
100
95 ▪ Social distancing effects until
90 mid-2021
85
80
▪ Vaccine developed by mid-
2019 2020 2021 2022 2023 2024 2025 2021
Pre-C19 forecast C19 Baseline C19 Pessimistic1
Source: Euromonitor International Macro model
▪ Probability – 32%
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OVERVIEW OF ECONOMIC TRENDS 14
Africa and Middle East and Latin America would be most affected
by a global second wave
2.0
Real GDP growth rate, %
0.0
-0.2
-2.0
-2.1 -1.8
-2.3
-4.0
-3.9
-6.0 -5.2
-6.1
-8.0
-8.1
-10.0 -8.8 -9.2
-12.0
-11.5
-14.0
Baseline Pessimistic1 Baseline Pessimistic1 Baseline Pessimistic1 Baseline Pessimistic1 Baseline Pessimistic1 Baseline Pessimistic1
Africa and Middle East Latin America Eastern Europe Western Europe Asia Pacific North America
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Our view in short C19 Pessimistic2:
Global GDP growth of
Global Real GDP Index, Baseline and Alternative Scenarios: 2019-2025 -5.6% in 2020 and
125 -1.9% in 2021
120
Index, Real GDP 2019=100
115
110 ▪ Multiple waves of the
105 pandemic
100
95 ▪ Social distancing effects until
90 the end of 2021
85
80 ▪ Vaccine delayed until
2019 2020 2021 2022 2023 2024 2025 2022/2023
Pre-C19 forecast C19 Baseline C19 Pessimistic1 C19 Pessimistic2
Source: Euromonitor International Macro model
▪ Probability – 17%
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OVERVIEW OF ECONOMIC TRENDS 16
Index, 2019=100
110.00
110.00
105.00
105.00
100.00 100.00
95.00 95.00
90.00 90.00
85.00 85.00
80.00 80.00
2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025
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120
110
100
90
80
70
2015 2016 2017 2018 2019 2020 2021 2022 2023
90 90 90
70 70 70
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
Australia and Pacific Islands 25% Australia and Pacific Islands 16%
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
No impact Slight impact Moderate impact No impact Slight impact Moderate impact
Extensive impact Not sure Extensive impact Not sure
Q: Please rate the impact of the COVID-19 pandemic on your current operations in the following regions. N=5707
© Euromonitor International Source: Euromonitor International Voice of the Industry Survey
MANUFACTURING SECTOR TODAY 23
Companies aim to Instead of relying on Investments in Companies reconsider Some of the social
diversify operating the megasuppliers, production digital strategies and distancing measures
risks and relocate companies aim to automation expected sales channels, with will prevail, forcing
part of their create a network of to accelerate greater focus on e- the companies to
production back to smaller suppliers commerce rethink how they
Europe and North operate their
America factories
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Q: What future measures do you expect your business to introduce or adapt to prevent similar risks in the future N=1514
© Euromonitor International Source: Euromonitor International Voice of the Industry Survey
5 KEY TRENDS SHAPING THE FUTURE 26
5. Optimise production
Greater Demand-driven volumes to potential
Flexibility demand and
transparency supply chain component delivery
changes
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5 KEY TRENDS SHAPING THE FUTURE 27
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5 KEY TRENDS SHAPING THE FUTURE 28
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5 KEY TRENDS SHAPING THE FUTURE 31
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5 KEY TRENDS SHAPING THE FUTURE 33
Invest More in Localised Production Average Wage per Hour by Region, 2019
Packaging World
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5 KEY TRENDS SHAPING THE FUTURE 35
0%
Metal Products Hi-tech Goods Transport Equipment Chemical Products Machinery
Other Other Other Other Other Synergies with
Transportation Chemical Products Machinery Transportation Transportation other industries
Machinery Metal Products Business Services Business Services Business Services
Energy Rubber and Plastic Metal Products Utilities Hi-tech Goods
Utilities Business Services Hi-tech Goods Energy Metal Products
Intra-industry Intra-industry Intra-industry Intra-industry Intra-industry Better adaption to
Industries with changes in end-
similar cost consumer
structure: Machinery Transport equipment, Machinery, hi-tech Plastic products, Metal products, demands
medical equipment goods pharmaceuticals transport equipment
© Euromonitor International Source: Euromonitor International from national statistics
5 KEY TRENDS SHAPING THE FUTURE 36
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5. Greater collaboration
▪ More information flow across
Measures to Prevent Similar Risks in the Future, June 2020 supply chains
Improve client/customer communications
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5 KEY TRENDS SHAPING THE FUTURE 39
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5 KEY TRENDS SHAPING THE FUTURE 40
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CONCLUSION 41
Main takeaways
Outlook for Advanced Economies started improving. However, global second wave and
COVID-19 vaccine delay risks should not be overlooked.
Asia Pacific region is set to recover quickest from COVID-19 economic downturn.
Supply chains are expected to become more flexible and transparent, encouraging
collaboration between suppliers and manufacturers.
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Thank You
Justinas Liuima, Senior Consultant Giedrius Stalenis, Economist
justinas.liuima@euromonitor.com giedrius.stalenis@euromonitor.com
@JLiuima @gstalenis
linkedin.com/in/justinas-Liuima/ linkedin.com/in/giedrius-stalenis-9b7b42164