The nation’s industrial production contracted 16.63 percent year-on-year last month, falling for the 13 month in a row, as persistent inflationary pressures and tight monetary policies from the world’s central banks depressed demand for products across the board, from semiconductors, flat panels and steel to petrochemicals, the Ministry of Economic Affairs said yesterday.
The industrial production index fell to 83.86 last month, with manufacturing production, a major contributor to Taiwan’s industrial production, dropping 17.15 percent annually to 83.03, ministry data showed.
During the first half of this year, industrial and manufacturing production fell 17.95 and 18.29 percent year-on-year respectively.
Photo: Ritchie B. Tongo, EPA-EFE
The ministry said it expects the manufacturing index this month to increase to between 82.95 and 86.95 from a month earlier, representing an annual decline of between 13 and 17 percent.
“It will take a bit longer and stronger end market demand for manufacturing production to return to healthy growth on an annual basis,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone.
“We are seeing moderate growth,” Huang said. “Hopefully, the index will register an annual expansion in the fourth quarter.”
The ministry has found some encouraging signs, he said.
The inventory index showed that local manufacturers reduced their inventories year-on-year, marking the first annual improvement in about two years, he said.
The ministry expects seasonal upticks to help fuel growth in the second half of this year, he said.
The production of electronic components, mainly chips, plummeted 22.4 percent year-on-year last month, with semiconductors tumbling 25.1 percent annually due to tepid demand for consumer electronics and customer efforts to digest inventory, ministry data showed.
Semiconductor output made up a significant portion of 37 percent of the nation’s overall manufacturing production last month, while flat panel production fell 5.8 percent annually, a much smaller decline compared with a 23.14 percent contraction in May.
Computers and optical component production slid 11.09 percent year-on-year, as weak economic growth and consumer spending curtailed demand for PCs and related components.
Rising demand for servers and networking equipment helped offset a decline in the production of automatic equipment and semiconductor testing equipment, the ministry said.
The production of basic metals, mostly steel, dropped 17.41 percent annually, due to sluggish demand, given a slow property market and weak demand for metal casings for consumer electronics, it said.
Overcapacity in China also dragged global steel prices down, it added.
Production in petrochemicals contracted 16.68 percent year-on-year due to sluggish demand from China, one of the two biggest export destinations for local manufacturers, the ministry said.
Production of machinery tools plunged 17.51 percent annually, as most companies slowed their capacity expansion in response to weak macroeconomic conditions globally, it said.
The automotive industry declined 2.42 percent year-on-year last month as some customers cut component orders to digest excessive inventory, it said.
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