The nation’s manufacturing sector is expected to see feeble growth next quarter, after last year’s flagging global economy dragged the sector into a 7.37 percent year-on-year contraction — the sector’s worst performance since 2009’s global financial downturn, the Industrial Economics and Knowledge Center (IEK) said yesterday.
The manufacturing sector is expected to rise an annual 0.36 percent by revenue in the second quarter, ending five quarters of declines, the IEK forecast.
Gradual growth would be maintained throughout the remainder of the year, sustained as global brands release new mobile devices by in the second half, it said.
For the whole of this year, the sector is expected to post anemic growth of 0.96 percent to NT$1.79 trillion (US$53.08 billion) from NT$1.78 trillion last year, dragged by continuing weakness in the LCD and mobile phone segments, according to the research house.
The LCD segment accounts for about 25 percent of the nation’s electronics manufacturing sector.
The annual growth is a slight upward revision from the 0.87 percent year-on-year growth IEK forecast three months ago.
“The slight upward adjustment is due to faster-than-expected inventory digestion for the electronics manufacturing sector,” IEK senior researcher Peter Chen (陳志強) said.
Overall, we see a very fragile improvement,” Chen said, adding that he attributed the growth to last year’s low base.
“The sector is not out of the woods yet. Based on current visibility, we expect any recovery to be a lukewarm ‘L shape,’ in contrast with the ‘V-shaped’ recovery of the economy in 2010,” Chen said.
Local manufacturers are to suffer a double blow from soft demand from their global clients due to weak macroeconomic factors and a bottleneck in upgrading technologies, Chen said, adding that LCD and handset makers are struggling to compete with their Chinese and South Korean rivals.
However, the semiconductor segment would be resilient this year, Chen said.
The semiconductor segment is the largest revenue contributor to the nation’s electronics manufacturing sector, accounting for 36 percent.
The electronics sector, petrochemical sector and livelihood sector including tourism are expected to resume growth this year, with revenued expected to grow at an annual rate of 2.16 percent, 3 percent and 0.6 percent respectively, the IEK forecast.
However, the basic metal and machinery segment, the second-biggest contributor to manufacturing output, is expected to drop at an annual 2.28 percent this year, due to persistent oversupply, the IEK predicted.
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