Thu, Sep 24, 2015 - Page 13 News List

Decline in industrial output accelerates

FALLING REVENUE:The Ministry of Economic Affairs said that domestic sales took a hit due to less orders of PC-related products and a decrease in orders from Japan

By Lauly Li  /  Staff reporter

The nation’s industrial production index plunged 5.46 percent to 104.47 points last month from a year earlier, following a 2.99 percent annual decline reported in July, the Ministry of Economic Affairs said yesterday.

“The size of the annual decline was larger than the ministry expected and marks the biggest annual drop in industrial production since March 2013,” Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a news conference.

“One of the main reasons that caused the decline in output was slower-than-expected inventory digestion in the semiconductor industry,” Yang said.

Yang said the launch of Apple Inc’s iPhone 6S significantly boosted the output of optical module products last month, but rendered limited benefit to the semiconductor industry due to high inventory levels.

The inventory-to-sales ratio for the semiconductor industry was about 56 percent last month, which is almost the same as in July and June, Yang said, adding that the industry foresees no catalyst to accelerate the inventory digestion in the near term.

Apart from the inventory issue, Yang said Typhoon Soudelor affected domestic manufacturers’ scheduled production plans between Aug. 8 and Aug. 12, taking a toll on many manufacturing plants nationwide.

“The typhoon unexpectedly dragged down manufacturing output last month,” he said.

The electronic components industry, the pillar of the nation’s manufacturing sector, saw a 3.28 percent annual decline in output last month due to weak demand for consumer electronics and increasing international competition, which caused panel makers and semiconductor companies to cut their production last month, Yang said.

The output of the computer electronics and optical module sectors also dropped 9.12 percent from a year earlier, mainly due to soft demand worldwide for handheld devices, Yang said.

“Poor sales of Android-based smartphones and fierce global competition affected the output of the computer electronics industry last month,” he said.

Citing a monthly ministry survey of local manufacturers, Yang said the nation might see another annual decline in industrial production this month, as the global economy remains weak and prices for crude oil and stainless steel could stay low in the near term.

“It might be challenging to maintain industrial production annual growth for the whole year,” he said.

In a separate release, the ministry said that domestic commercial sales dropped for the sixth straight month last month, declining by 2.9 percent to NT$1.17 trillion (US$35.19 billion) because of falling revenue in the wholesale sector.

In the first eight months of the year, the nation’s combined commercial sales totaled NT$9.3583 trillion, down 2.2 percent from a year earlier, the data showed.

Revenue in the wholesale sector, which accounted for 68.76 percent of total commercial sales, fell 4 percent to NT$805.5 billion last month from a year earlier, mainly due to a decline in purchases from Japan and a reduction in orders for PC-related products, Yang said.

Retail sector sales also declined by 0.7 percent annually to NT$328.6 billion last month, led by a 28.7 percent drop in fuel revenue amid falling global crude prices, Yang said.

Revenue in the food and beverage sector grew by 2.3 percent annually to NT$37.3 billion, supported by the increasing number of restaurants and promotional events, which boosted the sector’s performance, he said.

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