Industrial production fell 2.92 percent year-on-year last month, the second monthly contraction in a row, as the output of the manufacturing sector — the pillar of industrial production — declined 3.27 percent from a year earlier, the Ministry of Economic Affairs said yesterday.
However, output from other sectors showed mixed results, with the mining and quarrying sector dropping 13.15 percent, while the output of the water supply and electricity-and-gas supply sectors rose 4.56 percent and 2.74 percent respectively, the ministry said.
Within the manufacturing sector, the electronic components industry posted a contraction of 1.52 percent year-on-year after four consecutive months of growth, which the ministry attributed to a high comparison base last year and dwindling demand for integrated circuits.
The electronic components industry — the manufacturing sector’s biggest contributor — was also weighed down by declining LCD panel production as China-made panels continue to flood the market, the ministry said.
However, output from the computer, electronic and optical components industry increased 17.87 percent year-on-year, maintaining a strong momentum since October last year, it said.
The ministry attributed growth in those industries mainly to expanding domestic production of servers, laptops, routers and ethernet hubs, as Taiwanese companies and others relocate to Taiwan amid trade tensions between the US and China.
Production of camera lens for mobile devices and other optical components also increased on the back of an upward trend in multi-camera smartphones, it said.
Manufacturers in the traditional, non-electronics industries also posted declines with the exception of the automobile and auto parts industry, which saw a slight increase of 0.21 percent thanks to companies stocking up on new models.
Chemical materials industry output slipped 4.25 percent, dragged down by declining international crude oil prices.
The base metal industry’s output fell 14.22 percent, the largest decline over the past three years, and the output of the machinery equipment industry dropped 18.66 percent, continuing its double-digit annual declines for the sixth consecutive month, the ministry said.
It blamed falling market demand on the repercussions of the US-China trade dispute.
As production of machine tools such as ball screws and linear guideways slumped, the industry also suffered from the declining LCD panel production, it said.
In the first 10 months of the year, industrial production declined 1.21 percent from a year earlier, while output from the manufacturing sector shrank 1.33 percent, it said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
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