Industrial production fell 5.65 percent year-on-year last month as weak demand dampened the recovery following the Lunar New Year holiday, the Ministry of Economic Affairs said yesterday.
Last month’s data marked the ninth consecutive month of annual declines, the ministry said.
The government’s industrial production gauge for the nation’s main industries saw an across-the-board annual decline last month for manufacturing, mining and quarrying, electricity and gas supply, and water supply.
The sole exception was architectural engineering, as companies tend to initiate projects ahead of the Lunar New Year holiday.
The manufacturing sector — which accounts for more than 90 percent of industrial output — fell 6.32 percent year-on-year and 3.67 percent month-on-month.
In particular, the electronic components industry, which is the backbone of the nation’s manufacturing sector, saw an annual decline of 7.46 percent as tepid consumer electronics sales crimped inventory orders for ICs, printed circuit boards, display panels and glass substrates.
The semiconductor industry felt the brunt of the downturn last month, with output declining 10.52 percent year-on-year from the high basis set last year, the ministry said.
Production in the computer industry dipped 7.77 percent from the previous year due to soft demand for handheld devices, tablets, notebooks and semiconductor testing equipment, offsetting gains in output for smartwatches and computer components.
Industrial production is not expected to recover significantly until May, Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a news conference in Taipei.
“The slump will likely persist this month, due to the lull during the Lunar New Year holiday,” Yang said, adding that the Feb. 6 earthquake is estimated to dampened technology-sector output in the south by between 5 percent and 7 percent.
Meanwhile, the inventory-to-sales ratio for the manufacturing sector improved to 72.86 percent from 74.35 percent in December last year, with the figure for the electronic components industry improving to 52.34 percent from 57.2 percent.
“Although these figures indicate a period of inventory digestion in the electronics sector might be approaching its end, they do not signal a recovery in overall economic growth momentum,” Yang said.
“Companies often adjust their inventory levels in response to softening global economic growth,” Yang said, adding that a recovery would need a significant rise in sales and demand.
“Inventory levels among businesses will continue to fluctuate, but at a narrower band than previous economic downturns,” he said.
Yang said that the few bright spots are the steel and machine tools industries, where prices have began stabilizing and companies have been reporting better visibility of upcoming order volumes.
In a separate release, the ministry said that domestic commercial sales — which include the food and beverage, retail and wholesale sectors — last month fell 6.1 percent year-on-year to NT$806 billion (US$24.07 billion).
Despite a setback in wholesale sector, retail sales gained 6.9 percent year-on-year to NT$362.7 billion, a new monthly high, while restaurant sales gained 7.5 percent year-on-year to NT$37.6 billion, data showed.
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