Industrial production witnessed a significant decline in all countries at the onset of the COVID-19 pandemic. The recovery paths, however, varied remarkably. Production has soared in China, but it has struggled to return to pre-pandemic levels in Japan and the largest EU countries. Industrial production in the United States performed better than in its advanced economy peers, although it has not fully recovered.
While the US industrial sector has struggled to regain momentum over the past five years, China’s factories ramped up output. Even with booming oil production, broader manufacturing and industrial activity in America remain far from the levels achieved in early 2019.
Industrial production covers three key sectors—manufacturing, mining, and utilities—spanning from finished goods to the extraction of resources. In 1970, more than a quarter of American workers held jobs in the manufacturing sector. Today, it’s only about 8%.
US President Donald Trump’s administration says sweeping tariffs will reverse this decades-long decline. However, this vision of reinvigorated factory towns and assembly lines that defined America 50 years ago may be out of step with the requirements of the current industrial era.
In China, from the beginning of 2019 until the end of 2024, industrial activity, the largest driver of the Chinese economy, increased by 37%. It was fuelled by the EV sector, rising demand for critical minerals, and photovoltaic modules. China now holds 62% of the global market share of EV production.
Additionally, China produces 80% of the world’s lithium-ion batteries, bolstered by significant government policy support. The value of China’s industrial production reached $5.6tn in 2024, while it reached about $3.35tn in the United States in the same year, according to Trading Economics.
