Exports by the nation’s machine tool manufacturers are expected to rise a mild 5 to 6 percent annually to US$3.2 billion next year, as a global economic slowdown and geopolitical tensions weigh on machine and equipment spending, the Taiwan Machine Tool and Accessory Builders’ Association said yesterday.
However, Taiwanese companies would still outpace their international peers, as the global machine tools market is expected to contract 3 to 6 percent to about US$79.4 billion, the association said.
Growth in Taiwan’s exports would be driven by resilient demand from suppliers of electric vehicles, 5G devices and green energy applications, it said.
Photo: Lin Jin-hua, Taipei Times
“Although the global economic outlook is not very optimistic, we believe there is still a chance for local machine toolmakers to see growth in exports next year,” association chairman Patrick Chen (陳伯佳) told a news conference in Taipei.
“The industry will recover in the second quarter, benefiting from a revival of the manufacturing sector,” he said.
Chen said that political unrest, global interest rate hikes and soaring energy prices have led to economic slowdowns in the US, the EU and China, which has weakened demand for machine tools in those markets.
Local machine tool suppliers are having a rough ride this year, Chen added.
Customers showed robust demand in the first half of this year as manufacturers resumed capacity expansion after the global economy reopened, Chen said.
However, machine tool makers started feeling the pinch in the third quarter due to China’s “zero COVID-19” policy and prolonged effects of Russia’s invasion of Ukraine, he said.
Businesses are scaling back capacity expansion, or putting on hold new investment plans amid soaring inflation and rising commodity costs, he said.
The association cut its export growth forecast for the nation’s machine toolmakers to 9 percent this year, following a disappointing performance by the sector in the first 11 months, Chen said.
It had previously forecast annual expansion of 20 percent.
During the first 11 months, machine tool exports rose 9.4 percent year-on-year to US$2.76 billion from US$2.52 billion during the same period last year, the association said in a report early this month.
Exports to China, the biggest machine tool export destination for local suppliers, extended an earlier downtrend and dipped 11.8 percent annually to US$721 million from US$817 million, the report said.
China accounted for about 26.1 percent of the nation’s machine tool exports during the first 11 months of this year.
The US came next with a share of 14.8 percent as machine tool exports to the country jumped 37.7 percent year-on-year to US$409 million during the period, from US$297 million a year earlier.
Turkey retained its third spot, with exports totaling US$238 million, up 4.6 percent year-on-year.
Vietnam replaced Russia as the No. 4 destination for local machine tool manufacturers, with exports rising 20.2 percent annually to US$131 million over the period.
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