Tue, Jun 26, 2018 - Page 12 News List

New technology apps boosting manufacturers: TIER

Staff writer, with CNA

The manufacturing sector’s outlook improved last month amid strong growth in exports of electronic components as emerging technology applications boosted global demand, the Taiwan Institute of Economic Research (TIER, 台灣經濟研院) said yesterday.

The composite index, which gauges sentiment in the manufacturing sector, rose 3.36 points from April to 101.69 after a fall of 1.7 points in April, TIER said.

The rise came after exports of electronics components rose 15.9 percent from a year earlier and export orders for electronics parts rose 14 percent year-on-year.

However, the sub-index for the property development sector continued to move in the opposite direction, falling 0.33 percent to 94.89.

It was the fourth consecutive monthly decline for the sector as the supply of homes increased and building material prices rose, TIER said.

The composite index for the local service sector moved higher for the third month in a row to 101.69, up 1.89 from April, after the TAIEX rose 2.04 percent last month, TIER said.

Meanwhile, a TIER survey found 37.4 percent of manufacturers said the business climate improved last month, up from 29.4 percent in in April, while 11.6 percent said the climate deteriorated, down from 26.5 percent in the April.

Electronics and machinery businesses appeared more upbeat than any other in the manufacturing sector, TIER said.

The composite index of the manufacturing sector is expected to expand in the third quarter, a traditional peak season for the sector, TIER Economic Forecasting Center director Gordon Sun (孫明德) said.

Sun said he was particularly upbeat about new technology applications such as automotive electronics and smart devices.

However, he raised concerns about raw material export growth over the next few months if international crude oil prices do not rise as they have been expected to.

The 11.2 percent year-on-year increase in the nation’s exports in the first five months of this year was partially the result of higher raw material exports as foreign buyers built up inventories in anticipation of crude prices rising.

If oil prices do not increase, those buyers would have excessive inventories and order less from exporters, Sun said.

As for the possible impact of simmering trade friction between the US and China, Sun said both sides continue to threaten each other by imposing additional tariffs, but those tariffs have not yet been felt in the real economy.

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