Carpe Diem

World industrial output reached a new record high in 2012


The CPB Netherlands Bureau for Economic Policy Analysis released its monthly report yesterday on world trade and world industrial production for the month of December 2012. Here are some of the highlights:

1. World merchandise trade volume (adjusted for price changes) decreased in December by 0.5% on a monthly basis following a revised 0.7% increase in November, which brought the global trade index down to 168, just slightly below November’s all-time record high of 168.8 for the index (see blue line in chart). Compared to a year earlier, the volume of world trade in December was 1.94% higher.  Even with the monthly decline in December, world trade is almost 5% above the previous April 2008 peak of 160.2 in the early days of the US and global recessions, and world trade hasn’t declined on a year-over-year basis since October 2009.

2. Annual growth in trade last year was led by the emerging economies with a 5.6% in exports and 8.3% increase in imports, while advanced economies experienced decreases in both exports (-3.5%) and imports (-3.5%).

3. World industrial production (adjusted for price changes) finished last year with another month of solid growth in December, bringing world output to a new record high at yearend (see red line in chart).  World production increased by 0.6% in December on a monthly basis, following a 0.5% increase in November.  On an annual basis, world industrial output expanded by 2.8% in 2012, with especially strong annual output growth in Emerging Asia (8.7%) and the US (2.9%). Output declined in the Euro area (-2.2%) and Japan (-6.1%) last year.

4. At an all-time high index level of 149.6 in December, world industrial output is now almost 11% above its previous recession-era peak in February 2008 of 135.0, and 26.7% above the recessionary low of 118.1 in February 2009.

Bottom Line: World industrial output reached a new record monthly high in December, and world trade volume in December was down slightly from its record high level in November. The volumes of world output and world trade are now above their previous peaks (by almost 11% and 5% respectively) during the early months of the global slowdown, providing evidence that the global economy has now made a complete recovery from the 2008-2009 recession. At the forefront of the global recovery are the world’s emerging economies, which experienced especially strong growth last year in trade and output.

14 thoughts on “World industrial output reached a new record high in 2012

  1. This is indeed good news. The good news is US economy is slowly but surely expanding, positive indications are coming out of China, and rebounds in SE Asia and Korea, as well as Brazil are evident. Japan will hold things back. Europe will not necessarily be a drag, but they will not contribute much this year.

    All this will lead to steady improvement in the global economic picture.

  2. There remains a huge world output gap. The global economy, like the U.S., is in depression.

    And, while the U.S. made some progress getting out of the economic “rut,” the problem is the rut is much deeper.

    According to the Conference Board – Global Economic Outlook 2013, January 2013 update:

    “The global economy has yet to shake off the fallout from the crisis of 2008-2009. Global growth dropped to almost 3 percent in 2012 [from 3.6% in 1996-2005, with 3.3% growth in the U.S., subpar 2.4% growth in greater Europe and 1.0% anemic growth in Japan], which indicates that about a half a percentage point has been shaved off the long-term trend since the crisis emerged. This slowing trend will likely continue.”

    • Also, I may add, percentages can be misleading.

      When per capita income or output increases 10% on $3,000, that’s a $300 gain.

      When it increases 2% on $50,000, that’s a $1,000 gain.

      Growth increases at an increasing rate and then increases at a decreasing rate.

      • And depletion increases at an increasing rate, e.g. 100 barrels taken out when there are 1,000 barrels left is 10%, 100 barrels taken out when there are 500 barrels left is 20%, or increasingly fewer barrels are taken out.

          • Forget yourself so soon?

            Let’s remind people what you said about yourself just three days ago:

            I stated before:

            I know someone who runs a business delivering baggage at airports.

            When potential employees ask how much they can make, he says there are two or three people who make $150,000 a year.

            After people are hired, they find out they actually make less than $10 a hour and quit after two or three weeks.

            The owner and his son make $150,000 each.

            To follow-up:

            If I [PeakTrader] was advising the business (for a fee), I’d find ways to “string-along” the employees longer, e.g. say it’s a slow season or there should be some big contracts soon.


            Your arguments are seriously in question when you admit you are a liar.

          • You’re the one lying. How do you know it wasn’t a slow season or there shouldn’t be some big contracts soon?

            Creating or taking market share, for example, isn’t a lie.

          • How do you know it wasn’t a slow season or there shouldn’t be some big contracts soon?

            We don’t know, but it doesn’t matter. You suggested you would “string along” the employees a little longer. That says it all.

  3. Given global central banker’s passion for fiat currency devaluation … which if done uniformly leaves exchange rates unaffected but inflates commercial asset values … nominal data are uniformly worthless. Given constant governmental tampering with inflation metrics, nominal data from from “official” sources is propaganda.

    “Real” data, discounted for an honest measure of the devaluation of a non-fiat currency-equivalent, such as a market-priced basket of industrial and precious metals & materials like oil and lumber, would not produce such fanciful charts as this one.

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