More than 70 percent of the world’s factories rely on factory floors to assemble parts.
But in the cities where manufacturing is the primary economic activity, the numbers are even more stark.
“We are building an economy that depends on the jobs of millions of people,” the World Bank president said in an address to the United Nations General Assembly in March.
In fact, the global economy is set to be more than twice as large as it was in 2009, the last time the world recorded a peak in the number of manufacturing jobs.
To reach that level of expansion, the world needs to increase the percentage of manufacturing workforce in urban centers, and we’re not doing that yet, said Mark Zandi, chief economist at Moody’s Analytics.
Zandi believes that’s going to be critical for the global labor market to recover.
And the world economy is already experiencing a strong recovery from the financial crisis.
But a slowdown in manufacturing is also a challenge that could push the global recovery into the worst economic downturn since the Great Depression.
A slowdown in factory employment could reduce growth and push down wages and prices.
Zankis comments come on the heels of a report that suggests global manufacturing employment will drop by about 1 million jobs over the next four years.
The report from the London-based Oxford Economics Institute found that a global drop in manufacturing jobs would have a “massive” impact on global growth.
That’s because manufacturing jobs tend to go to people who are in low-wage or temporary positions.
In a recent article for the New York Times, economists at Oxford Economics pointed out that the world is going to need to ramp up its manufacturing investment by $30 trillion over the course of the next 10 years to get a significant boost in growth and employment.
Zanksi says that means a “huge” stimulus package for the manufacturing sector will have to be provided by the world at large.
In the coming years, Zanki says the U.S. and China are expected to ramp-up investments in factories and other manufacturing-related sectors in a way that is not driven by market demand.
That means more than $1 trillion in additional investment is needed over the coming decade, he added.
“Manufacturing jobs will be key to any recovery, because they’re a huge contributor to GDP growth and jobs,” Zandi said.
“The U.K., France and Germany have been the main focus of investment in the manufacturing industry, and they have a lot of the key components in the global supply chains.”
Zankies research found that, globally, about 90 percent of manufacturing companies were either already doing business in the U, Canada, Australia, India, Germany or Japan.
The U. S. and Germany were the biggest growth engines for the U’s manufacturing industry in the next decade, according to the Oxford Economics report.
The UK, China and France are expected the most to see a dramatic boost in the world of manufacturing, and the U will also see an enormous boost in employment.
“There are three ways to do this,” Zankois said.
The first is to invest more in infrastructure.
“What we know is that infrastructure investment is one of the most important ways to drive growth in the long term,” Zanks said.
He said the second is to create more manufacturing jobs in areas that are still struggling.
“That’s where you have to do the real job-creating part of this,” he said.
In places like Europe, China, South Korea, Mexico and other countries, Zanks says “they have to go into manufacturing to get the jobs they need.”
The third is to build a strong manufacturing sector that is focused on manufacturing and high-tech products.
Zanesi believes the U can do both, because “the U. K. is the only country in the developed world that has a strong high-technology manufacturing sector.”
That sector is likely to have a huge impact on the global manufacturing economy, and could push up the world to a peak of manufacturing employment by 2030, Zandi added.