Tue, Jul 24, 2012 - Page 13 News List

Industrial output ‘struggling:’ experts

NOT MADE IN TAIWAN:Since national output declined for the fourth month in a row, economic outlook seemed bleak, yet the electronics sector did post 2.9 percent growth

By George Liao  /  Staff reporter

Taiwan’s industrial output index decreased 2.44 percent to 128.59 points last month from the same period last year, following a 0.21 percent fall in May and a 1.78 percent decrease in April as the global economic slowdown continued to take its toll, the Ministry of Economic Affairs said yesterday.

Manufacturing sector production — which accounts for more than 90 percent of the nation’s total factory output and includes the electronics, chemical, machinery, foodstuff and textile industries — fell 2.31 percent year-on-year last month, after a 0.37 percent drop in May.

The decline was primarily caused by output contraction in the sectors of machinery equipment, computers, electronics and optical products, director of the ministry’s statistics department Lin Lee-jen (林麗貞) said at a press conference.

The 13.79 percent decline in the output of machinery equipment was mainly caused by decreased orders from China, India and Brazil, while the 12.27 percent decline in computers, electronics and optical products was due to waning demand for consumer electronics amid the weak global economy, data showed.

However, the electronic components sector’s output grew 2.9 percent last month from a year ago, on the back of strong global demand for mobile smartphones and tablets, which benefited semiconductor manufacturers, as well as from government subsidies for energy-saving home appliances and the London Olympic Games, which drove up panel production, Lin said.

Taiwan’s industrial output declined for four consecutive months before last month, while the nation’s export orders have also dropped four months in a row since February, the ministry’s data showed.

Cumulatively, manufacturing output shrank 3.26 percent in the first six months from the same period last year, with machinery equipment, textiles, computers, electronics and optical products accounting for the steepest declines.

“Production is struggling to eke out a sustained improvement as global tech demand remains weak,” Katrina Ell, an associate economist at Moody’s Analytics based in Sydney, said in a note yesterday.

For this month, Lin predicted manufacturing output would remain flat compared with last month, based on the ministry’s survey of manufacturers, as sentiment continues to be dampened by the persistent eurozone debt crisis, the slow recovery of the US economy and a slowdown of China’s economic growth.

Nonetheless, overall industrial output would increase slightly in the third quarter from the second quarter based on a sentiment survey, she added.

Separately, the ministry yesterday released the nation’s domestic trade figures for last month, with revenue totaling NT$1.2 trillion (US$39.29 billion), down 0.87 percent year-on-year and 0.07 percent month-on-month.

Cumulative revenue in the first six months amounted to NT$6.98 trillion, down 0.58 percent from the year before, the data showed.

Like industrial production, last month’s domestic trade data surprised the Moody’s economist.

“Consumers are holding back spending as global ructions are generating heightened uncertainty about future economic conditions and weighing on the stock market, particularly concerning in Taiwan given the high level of direct share ownership,” Ell said in the note.

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