Pos­si­ble 3rd con­sec­u­tive month of fall­ing in­dus­trial pro­duc­tion

The China Post - - LOCAL -

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.

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