Industrial production dropped 3.65 percent annually last month, representing the smallest annual decline in the past seven months, supported mainly by rising output of stainless steel and chemical products, the Ministry of Economic Affairs said yesterday.
“The size of the annual contraction could have been smaller if the production of some electronics manufacturers were not affected by the earthquake last month,” the ministry’s Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a press conference.
Last month’s result also marked the 10th consecutive month of annual declines, ministry data showed.
The manufacturing sector, which contributed more than 90 percent of total industrial output, contracted 4.65 percent last month from a year earlier, the data showed.
Yang said the electronics component industry, which is the pillar of the nation’s manufacturing sector, saw a 7.01 percent annual decline in production last month.
He attributed the drop to the impact of the Feb. 6 earthquake, which killed 117 people and injured more than 500 in Tainan, as well as a higher comparison base last year.
Production of machinery and equipment plunged 12.4 percent year-on-year last month on weak global demand and intensified international competition.
“The production of machine tools, linear guideways and ball screws continued to drop from a year ago,” Yang said.
The chemical and basic metal industries were the bright spots last month, with output growing from a year earlier, data showed.
“Fueled by rising global crude oil prices and restocking demand, chemical output climbed 2.06 percent annually last month,” Yang said.
The production of basic metals swung back into positive territory, growing 2.61 percent annually last month, as the average selling price of stainless steel recovered and demand for inventory replenishment rose, he said.
Given a higher comparison base last year, the ministry expects industrial production for this month to drop by between 5 percent and 8 percent.
“Overall, industrial production for this quarter is expected to decline from a year ago, but it is likely to hit the bottom this quarter and could start to grow on an annual basis in May,” Yang said.
Moody’s Analytics economist Emily Dabbs said in a note that the slowdown in China would weigh on Taiwan’s manufacturing sector through most of the year.
In a separate release, the ministry said that the nation’s commercial trade reported total revenues of NT$981.4 billion (US$30.08 billion) last month, down 6.96 percent from NT$1.05 trillion a year earlier.
The decline was mostly due to the wholesale sector, which dropped 11 percent to NT$611.3 billion from a year earlier owing to lower orders for notebook computers and televisions from Japan, as well as weak demand for machinery, Yang said.
Revenue from the retail and restaurant sectors increased 0.1 percent and 3.4 percent to NT$330.3 billion and NT$39.8 billion respectively last month, both record highs, Yang said.
The ministry forecast that the retail and restaurant sectors would grow by between 2 percent and 4 percent annually this month, while the wholesale sector would fall by 8 percent.
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