The decline in machinery exports last month accelerated to an annual rate of 12.7 percent due to sluggish demand amid lukewarm global economic growth, according to industrial data complied by the Taiwan Association of Machinery Industry (台灣機器工業公會).
Machinery exports last month declined to US$1.45 billion from a year earlier, data showed.
In August, exports contracted 6.4 percent annually, according to the data.
From January through last month, machinery exports fell 6.3 percent to US$15.3 billion from the same period last year, the association said.
“Customers worldwide are also suffering from slow demand, including in China and the US,” association secretary-general Wang Cheng-ching (王正青) said by telephone yesterday.
In the first nine months of the year, machinery exports to China, the sector’s largest export destination, declined 12.2 percent from a year earlier to US$3.64 billion, while exports to the US, the sector’s second-largest export destination, only increased by 0.3 percent annually to US$2.83 billion.
The sharp depreciation of the Japanese yen caused significant harm to Taiwan’s machinery industry as a weak yen helped Japanese competitors secure more orders from local suppliers, Wang said.
Taiwan’s foreign-exchange policy is not flexible enough to adjust to rapid changes in the global market, he said.
To help local manufacturers compete with global rivals, the New Taiwan dollar should be depreciated to between NT$32 and NT$33 against the US dollar, Wang added.
The NT dollar closed at NT$31.616 against the US dollar in Taipei trading yesterday.
However, local machinery companies might see a rebound next year, due to new business opportunities in the “smart” machinery sector, Wang said.
“Most global clients are hesitant to invest more on equipment as the global economy remains sluggish, but in the long term, there is still a lot of room for growth in the [smart machinery] sector,” he said, adding that the industry might bottom out this year.
Despite Beijing having launched measures to curb overcapacity in its manufacturing sector, Chinese companies still need high-end precise machinery products for further industrial transformation, which would definitely benefit Taiwanese manufacturers, Wang said.
Taiwanese manufacturers are seeking collaborations with companies from different fields to stimulate exports and raise the competitiveness of the traditional manufacturing industries.
The association said it is planning to cooperate with Aerospace Industrial Development Corp (漢翔航空工業), the nation’s largest civilian and military aircraft manufacturer, without providing further details.
The association is also planning to establish Erlin Precision Machinery Park (二林精密機械園區) in a bid to further integrate industrial resources. The park, which is seen as a hub for precision machinery companies, is undergoing an environmental impact assessment by the Changhua County Government.
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