Manufacturing output falls 4.57 percent

Posted on 20 August 2019

Source: Taipei Times

The nation’s manufacturing output contracted in the second quarter for a second consecutive quarter, amid a global economic slowdown fueled by unrelenting trade tensions between the US and China, the Ministry of Economic Affairs said yesterday.

Production in the manufacturing sector last quarter slipped 4.57 percent year-on-year to NT$3.32 trillion (US$105.89 billion), following a 4.95 percent decline in the first quarter, the ministry said.

Despite declines in output across various industries within the sector, the computer, electronic goods and optical components industry saw output surge 20.93 percent to NT$188.4 billion — a four-year high — thanks to greater production of servers, routers and networking switches, the ministry said.

Robust sales of controllers for automotive electronics and temperature regulators also helped boost production in the computer, electronic goods and optical components industry, the ministry said.

“We see rising domestic production thanks to transferred orders,” Statistics Department Director-General Wang Shu-chuan (王淑娟) said by telephone yesterday. “The industry is expected to show similar growth momentum over the next couple of quarters.”

The electronics components industry, the manufacturing sector’s largest industry, reported that output fell 6.42 percent to NT$859.1 billion, the ministry said, citing a decline in output among IC companies and LCD panel makers due to prolonged inventory adjustments and low demand in a market flooded by China-made LCD panels.

With a slowing global economy weighing on international crude oil prices, output in the chemical materials industry sank 14.79 percent to NT$426.5 billion, the ministry said, adding that petrochemical plant incidents contributed to the decline.

Output from the machinery equipment industry fell 10.79 percent to NT$167.3 billion, due to weakening demand, a consequence of increasing market volatility amid the US-China trade dispute, as evidenced by declines in the production of ball screws, linear guideways and machine tools, the ministry said.

However, it is not worried about production in the machinery equipment industry.

“We are still optimistic... Output will increase as companies return to Taiwan” and need to purchase machinery for their plants, Wang said, adding that it would take time to see positive effects as relocating manufacturing facilities is a long process.

Output from the base metal industry declined 11.29 percent to NT$188.4 billion, as the industry continued to suffer from steel tariffs imposed by the US and European countries, the ministry said.

Output from the automobile and auto parts sector only fell by 0.83 percent to NT$95.6 billion, amid steady sales of trucks, despite domestic automakers losing market share to international brands, the ministry said. 

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