The nation’s industrial output contracted by 5.32 percent last month from a year earlier, virtually unchanged from a revised 5.75 percent decline in August, as inventory digestion dragged on for all makers except chemical product suppliers, the Ministry of Economic Affairs said yesterday.
“The data show the industry has yet to emerge from a protracted inventory adjustment, which has extended into the current quarter,” Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a media briefing.
The situation might improve with the advent of Christmas sales season in the West, but could remain soft compared with levels a year earlier, Yang said.
The government’s industrial production gauge measures output in five major industries — manufacturing, mining and quarrying, electricity and gas supply, water supply, and architectural engineering — and is expressed as a percentage of real output in the base year of 2011 with a score of 100.
The latest production gauge showed that output from the manufacturing sector — which accounts for more than 90 percent of industrial output — dropped 5.6 percent last month from a year earlier.
A closer look at the various sectors within the manufacturing industry show that output from the electronics sector dropped 7.46 percent last month from a year earlier, with semiconductor makers posting a 7.68 percent decline and flat-panel and critical components suppliers printing an 18.81 percent fall, the report showed.
Electronics firms weighed 31.68 percent of total manufacturing output as the nation is home to the world’s leading contract chipmakers, display vendors and camera lens vendors.
Solar battery suppliers proved to be the exception with production jumping 24.64 percent last month from a year earlier, thanks to demand from China, the report said.
During the July-to-September period, industrial production weakened 4.56 percent from a year earlier, while output from the manufacturing sector dropped 4.65 percent annually, the report showed, boding ill for third-quarter GDP figures that are to be announced on Friday next week.
For the first nine months, industrial production shrank by a mild 0.19 percent from a year earlier, while the manufacturing sector’s output managed 0.13 percent gain year-on-year, the report said.
An outlook survey printed 45.1 percent for this month, suggesting a continued inventory adjustment event though the output value might grow modestly, Yang said.
In particular, car and auto-parts makers are upbeat about business prospects after emerging from the lunar Ghost Month and typhoons that dented production by 4.41 percent last month and by 5.7 percent last quarter, Yang said.
Revenues from non-manufacturing sectors — including wholesale, retailers and restaurant operators — dropped 4.5 percent year-on-year to NT$1.19 trillion (US$36.60 billion) last month, a separate report showed.
Wholesale revenue amounted to NT$833.9 billion last month, dropping 5.3 percent from a year earlier, weighed by lower demand for building materials, memory chips, flat panels and steel products, the report said.
Retail sales registered a 3 percent annual decline to NT$321 billion, attributable to lackluster car and fuel purchases, the report added.
Dining expenditure gained 1.5 percent year-on-year to NT$33.2 billion last month, slowing from pickups of 2.3 percent and 2.9 percent in August and July, the report said.
The ministry said its survey among local retailers and restaurant operators showed that they expect business to strengthen this month, but wholesale companies have adopted a conservative view.
The ongoing anniversary promotions among department stores might spur demand in line with the high season, Yang said.
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