Industrial production declined 6.17 percent last month, the eighth consecutive month of annual contraction, the Ministry of Economic Affairs said yesterday.
The result translated into a 1.66 percent decline in industrial output from 2014 and was the first annual decline since 2013, the ministry said.
“The annual decline last year was the largest drop since the global financial crisis in 2009,” Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a news conference.
The government’s industrial production gauge measures output in five major industries: manufacturing; mining and quarrying; electricity and gas supply; water supply; and architectural engineering.
Last month, the manufacturing sector’s output — which contributes more than 90 percent of industrial output — fell 5.52 percent year-on-year.
“The manufacturing sector’s fall in output last month was mainly because of a soft global economy and fewer orders before the Lunar New Year holiday,” Yang said.
Output of computer electronics, optical electronics, stainless steel and machinery goods last month registered a double-digit percentage point plunge from a year earlier.
Production in the electronics components sector, which is a pillar of the nation’s manufacturing industry, fell 4.09 percent from a year earlier, amid weak demand for consumer electronics products and flat panels, Yang said.
The only bright spot was the petrochemical sector, with output last month increasing 4.62 percent year-on-year due to inventory restocking and a lower base of comparison, Yang said.
Overall, the manufacturing sector’s inventory-to-sales ratio grew 1.6 percentage points to 74.6 percent from a month earlier, because some semiconductor companies and flat-panel makers received rush orders from clients, Yang said.
However, the sales situation in the end market remained weak, he added.
The ministry will only consider industrial production to be at a healthy level when the inventory-to-sales ratio falls to less than 65 percent, Yang said
The ministry foresees output this month to continue falling from a year earlier, but the size of the annual contraction is expected to be within 5 percent, as the semiconductor industry is likely to complete its inventory digestion and demand for solar power products might increase, Yang said.
If global demand stabilizes in the near term, industrial output might have a chance to swing into positive territory next quarter at the earliest, he said.
Separately yesterday, the ministry also released the latest statistics on the nation’s commercial sales, which showed that domestic trade dropped 1.78 percent from NT$14.59 trillion (US$432.87 billion) in 2014 to NT$14.33 trillion last year, due mainly to falling sales in the wholesale sector.
Revenue from the wholesale sector, which contributed 67.82 percent of total commercial sales, fell 3.9 percent annually to NT$9.72 trillion last year because of a sharp decline in TV and notebook orders from Japan, the ministry said.
Sales in the retail and restaurant sectors both posted record highs last year, with retail revenue edging up 0.3 percent annually to NT$4.19 trillion and restaurant sales climbing 2.7 percent to NT$424.1 billion from a year earlier, the data showed.
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