The nation’s manufacturing industry is expected to see better-than-expected revenue growth of 2.52 percent this year, underpinned by improving global demand for computers and rebounding crude oil prices, the Industrial Economics and Knowledge Center said yesterday.
Three months ago, the Hsinchu-based research house estimated that local manufacturers would only eke out 1 percent annual revenue growth this year.
“We [recently] saw more signs pointing to a rebound in the nation’s exports and manufacturing output... However, the recovery looks feeble,” the center’s policy and regional research division deputy director Peter Cheng (陳志強) told a media briefing.
Photo: Wang Meng-lun, Taipei Times
The effect of US president-elect Donald Trump’s protectionist stance toward trade has not been factored into the forecast, he added.
The manufacturing sector is likely to see revenue expand to NT$17.32 trillion (US$547.7 billion) this year, with the petrochemical industry taking the lead, the center said.
“Global crude oil prices have moved up more rapidly than we expected as OPEC members agreed to cut output through June,” Cheng said.
Crude oil prices are forecast to climb about 20 percent to an average of US$55 per barrel this year, more than the US$50 estimated previously, he said, citing the latest projections from the IMF.
That prompted the center to drastically increase its annual growth forecast for the petrochemical industry, a major contributor to the nation’s manufacturing output, to 5.48 percent this year on NT$4.35 trillion in revenue, compared with yearly growth of 1.23 percent it estimated previously.
The information and communications technology sector, the biggest contributor to the manufacturing industry, is expected to grow 3.47 percent to NT$6.19 trillion in revenue this year, a larger gain than the center’s earlier estimate of 2.05 percent annually.
Improving demand for PCs and smartphones would significantly boost semiconductor companies, Cheng said.
However, the center kept unchagned its forecast for the basic metal and machinery sector, which primarily consists of steelmakers, to remain in the red, with revenue expected to fall 0.6 percent annually to NT$4.58 trillion due to an ongoing supply glut.
The revenue of the livelihood sector — including the textile industry — was forecast to grow 0.92 percent annually to NT$2.2 trillion this year, unchanged from the center’s previous estimate.
In a separate report, the center forecast that the nation’s automotive industry would grow between 4.4 and 4.5 percent annually this year to between NT$611.5 billion and NT$617.7 billion, compared with NT$585.7 billion last year.
The forecast was attributed to stable crude oil prices, a better global economy and tax incentives for car replacements, analyst Hsieh Lu-lin (謝騄璘) said.
However, Trump’s call for automakers to move manufacturing jobs to the US could reduce exports of Toyota Motor Corp’s vehicles made by Taiwan’s Kuozui Motors Ltd (國瑞) in the long term, as the Japanese automaker plans to build new plants in the US over the next few years, Hsieh said.
Taiwan Transportation Vehicle Manufacturers Association director Wu Chih-kwei (吳智魁) said he expects local automotive components suppliers — such as Tong Yang Industry Co (東陽實業), which supplies automotive sheet metal and bumpers — to benefit from automakers moving jobs to the US.
“That will create an extra growth area for local companies, as new car plants could also mean bigger aftermarket demand,” Wu said.
The US is the biggest export destination for local automotive components makers, accounting for about 45 percent of total exports by value in 2015, the center said.
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