Wed, Apr 24, 2019 - Page 12 News List

Industrial output plunges 9.88%

SLOW SEASON:Inventory adjustments and cooling demand for cryptocurrency miners were the main factors behind last month’s decline, an economics ministry official said

By Natasha Li  /  Staff reporter

Industrial production last month fell 9.88 percent from a year earlier, dragged mainly by weakness in the electronic components industry amid a slow sales season, the Ministry of Economic Affairs said yesterday.

Industrial output declined 4.58 percent last quarter from a year earlier, with a 4.8 percent drop in the electronic components industry, the ministry said in a report.

Electronics suppliers saw a 14.92 percent retreat in output last month, the steepest since May 2009, it said.

Inventory adjustments and cooling demand for cryptocurrency miners were the main factors leading to the decline, which might not improve until next quarter, the ministry said.

“Cryptocurrency mining peaked at about this time last year and raised the comparison bar,” Department of Statistics official Hung Shu-chuan (洪淑娟) said. “The difference is noticeable.”

On the other hand, the computer electronics and optics industry reported double-digit growth for the sixth consecutive month at 13.87 percent, thanks to facility repatriations from China, Hung said.

New smartphone models feature high pixel counts and multiple cameras, lending production support to local suppliers of camera lenses, Hung said, explaining why production largely held steady in the optical industry despite a slow season.

Flat-panel display suppliers reported positive growth, as they benefited from an increase in demand from China, the report said.

Of the traditional sectors, steel product vendors took the hardest hit from ongoing trade tensions between the US and China, the ministry said.

The machinery equipment industry reported an output decline of 17.9 percent, as companies avoided investing in equipment during the tariff dispute, it said.

Production for the automotive and auto parts industry declined 14.59 percent, as foreign peers snapped up market share from local suppliers, it said.

A delay in new model launches contributed to the decline, the ministry added.

Basic metal production dropped due to weak demand from clients in the construction and home appliance businesses, it said.

The ministry expects the decline in industrial output to persist this month and next month based on a survey of manufacturers, it said.

However, orders should improve in the second half, Hung said.

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