As already demonstrated in our previous paper focusing on European manufacturing, pollution data can serve as a useful and timely gauge for industrial production and manufacturing output. Analysis using city-level pollution data shows that industrial production globally — while having rebounded from lows — has not yet recovered from the lockdown-induced collapse.
In the U.S., industrial production rebounded from the April lows, but the recovery has been slow with our model suggesting IP growth in July -9% year-over-year. Canada has similarly rebounded but could see July IP numbers still 10% below 2019 levels.
China rebounded from its lows and saw positive year-over-year growth in April-June, but pollution data suggests growth has moderated in July to near-flat. Regionally, we expect South Korea to rebound to positive growth in July, India to rebound but still be significantly below its 2019 levels with a similarly tepid rebound in Japan.
In Latin America, data indicates a slow rebound could be seen in Brazil but Chile continues to decline.