Falling yen hurting local machine industry: report

By Amy Su  /  Staff reporter

Thu, May 09, 2013 - Page 14

The output value of Taiwan’s manufacturing sector is likely to grow 4.23 percent this year on the back of strong sentiment in the integrated-circuit, flat-panel and electronic components industries, the Industrial Technology Research Institute (ITRI, 工研院) said in a report yesterday.

However, the continued depreciation of the Japanese yen may drag down the output value of the machine tool and machinery sectors, raising uncertainty for the entire manufacturing sector this year.

The Industrial Economics and Knowledge Research Center (IEK) — an ITRI unit — yesterday published the results of its current quarterly model (CQM) to forecast manufacturing sector trends.

The research, compiled by IEK and Shih Hsin University, showed that the manufacturing sector’s output value may reach NT$17.8 trillion (US$603.39 billion) this year, an annual rise of 4.23 percent.

The output value of the manufacturing sector grew 1.75 percent year-on-year in the first quarter and is set tp expand 5.84 percent, 3.48 percent and 5.73 percent in the second, third and fourth quarters respectively, the data showed.

“Despite weaker-than-expected exports in the first quarter, the capital equipment imports in certain industries still showed significant growth,” IEK director Stephen Su (蘇孟宗) told media, adding that this may indicate strong deferred demand in the second half.

However, the report said the output value of the machine tool industry would fall by between 4.5 percent and 7.9 percent this year, while the machinery industry would post growth of between 0.1 percent and minus-4.3 percent.

A nearly 20 percent depreciation in the Japanese yen against the US dollar is the biggest challenge for Taiwanese manufacturers as it has enabled Japanese rivals to secure more export orders, the IEK said.