Possible 3rd consecutive month of falling industrial production
The Ministry of Economic Affairs (MOEA) said Saturday that Taiwan’s industrial production is likely to show a year-on year drop in July for the third consecutive month amid a global economic slowdown.
While the July industrial production figure is expected to improve from June, it is likely to be lower than in July 2014 because of a relatively high comparison base, the ministry said, ahead of its release of the industrial production data on Aug. 24.
In June, Taiwan’s industrial production index fell 1.35 percent from a year earlier to 106.42 in reflection of weakening demand for high-tech gadgets such as smartphones and PCs amid a global economic slowdown. The June figure was 0.02 percent higher than May.
The sub-index for the local manufacturing sector, which accounts for more than 90 percent of the country’s total industrial production, fell 1.18 percent from the previous year and 0.41 percent from a month earlier.
Among the various segments in the manufacturing sector, the flat panel industry saw a 6.44 percent year-on-year drop in production in June, and computer/electronics/optoelectronics suppliers en- countered a 12.33 percent decline, while semiconductor makers recorded a 6.23 percent year-on-year increase.
The MOEA said that continued weakness of international crude oil prices and falling steel prices have affected local industrial production, while rising competition from foreign rivals has also squeezed shipments by Taiwanese firms’ shipments. As a result, the July industrial production is likely to register a year-on-year decline, the ministry said.
The silver lining is that the semiconductor sector may report higher shipments in July after inventory adjustments in the first half of this year, and optoelectronics firms could benefit from an increase in orders from clients who are anticipating a buying spree at the end of the year, the MOEA said.
Meanwhile, the July commercial revenue data, also scheduled to be released Aug. 24, is likely to show a year-on-year drop for the fifth consecutive month in reflection of low oil prices and a decline in purchasing from Japan, the ministry said.
In June, Taiwan’s commercial revenue, which comprises wholesale, retail and dining services sales, fell 3.0 percent from a year earlier to about NT$1.2 trillion (US$36.81 billion) in June.