Tai­wan’s ma­chine tool out­put likely to grow in 2015 due to de­mand from US

The China Post - - LOCAL -

The pro­duc­tion value of Tai­wan’s ma­chine tool sec­tor is ex­pected to grow slightly in 2015 be­cause of grow­ing de­mand from the United States, the world’s largest econ­omy, ac­cord­ing to the Industrial Eco­nomics and Knowl­edge Cen­ter (IEK).

In a re­port, the IEK said Tai­wanese ma­chine tool mak­ers could also get a boost this year from ris­ing de­mand in some Euro­pean coun­tries, such as Spain and Switzer­land, and from higher car sales driven by lower fuel prices.

The out­put value of Tai­wan’s ma­chine tool busi­ness will grow 1.3 per­cent to 2.5 per­cent in 2015 to about NT$152.9 bil­lion (US$4.92 bil­lion), ac­cord­ing to the IEK, a re­search unit un­der the gov­ern­mentspon­sored Industrial Tech­nol­ogy Re­search In­sti­tute ( ).

The pro­jected growth would lag be­hind the 6.8 growth seen in 2014 when man­u­fac­tur­ing ac­tiv­ity in the ma­jor economies of the world staged a strong re­bound, the IEK said.

The U.S., main­land China, Europe and Ja­pan are the big­gest mar­kets for Tai­wan’s ma­chine tool firms, the IEK said, with ex­ports ac­count­ing for about 80 per­cent of Tai­wan’s ma­chine tool sales over the past five years.

But sev­eral fac­tors could hurt Tai­wan’s ex­ports of ma­chine tools this year.

With the main­land re­struc­tur­ing its econ­omy, ab­sorb­ing ex­cess ca­pac­ity and strength­en­ing its own do­mes­tic sup­ply chains, de­mand for ma­chine tools from the main­land Chi­nese mar­ket is ex­pected to stay un­changed this year, the IEK said.

De­mand from Europe could be af­fected by the con­ti­nent’s high un­em­ploy­ment rates, tight­en­ing fis­cal poli­cies and de­fla­tion­ary pres­sures, and de­mand from Rus­sia, Thai­land and In­done­sia could also stag­nate be­cause of ei­ther geopo­lit­i­cal ten­sions or an ex­o­dus of for­eign funds, the IEK said.

Do­mes­tic ma­chine tool sales could rise about 8 per­cent this year from a year ear­lier, how­ever, help­ing off­set the un­fa­vor­able ex­ter­nal fac­tors to some ex­tent, the IEK said. Quaser Ma­chine Tools Inc. (

) Pres­i­dent Liao Tzu-en said he hoped Tai­wan’s gov­ern­ment will help the lo­cal ma­chine tool sec­tor by keep­ing the value of the Tai­wan dollar down and keep the coun­try com­pet­i­tive at a time when weak­ness in the Ja­panese yen and the euro is hurt­ing Tai­wanese ex­porters.

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