Output of Taiwan’s manufacturing sector is expected to grow 3.42 percent to NT$18.14 trillion (US$618.28 billion) next year, driven by a steady global economic recovery that benefits the nation’s exports of manufactured goods, the Industrial Technology Research Institute (ITRI, 工研院) said yesterday.
However, the institute revised downward its forecast for this year’s output to increase 2.73 percent to NT$17.54 trillion from last year. It was the second time this year that the institute lowered its growth forecast for manufacturing output.
In July, it cut its projection to 2.84 percent from 4.23 percent.
“With the US’ and most European countries’ macroeconomic conditions steadily recovering, Taiwan’s manufacturing sector next year may obtain increasing orders from China, which now has become a major trade partner to nearly every country in the world,” Stephen Su (蘇孟宗), director at the ITRI’s Industrial Economic Knowledge Center (IEK), told a press conference.
Among local manufacturing sectors, output of information-technology hardware is predicted to increase the most, by 5.38 percent next year, supported by demand for new mobile devices, such as tablets and smartphones, as well as wearable accessories, such as smartwatches and smartglasses, according to the IEK’s report.
Output of chemical products was forecast to increase 3.79 percent next year on the back of rising demand for new high-tech devices and growing demand for consumer goods amid the global economic recovery, the report said.
However, output of the machinery and electronics sector will grow at a milder rate of 1.37 percent next year, as growth in the production of basic metals, machinery and factory equipment is likely to be offset by softening machine tool exports, the report said.
“The US Federal Reserve’s plan to scale back its bond-buying program is not likely to dramatically affect Taiwan’s manufacturing sector in the short term,” ITRI researcher Peter Chen (陳志強) said.
While the Fed has not yet taken action, Taiwan’s central bank is ready to implement measures to stabilize consumer prices, which can indirectly help ease manufacturers’ concerns over rising costs, he added.
However, numerous uncertainties, including the rate of economic growth in emerging markets and possible side effects from the nation’s recently enacted electricity rate hike, may curb growth in Taiwan’s manufacturing sector after next year, Chen said.
In addition, as a result of accelerating demand for crude oil around the world, rising crude oil prices may increase local firms’ costs and affect their global competitiveness in the long term, he added.