Man­u­fac­tur­ing out­put forecast to shrink in 2015

The China Post - - TAIWAN BUSINESS -

The out­put of Tai­wan’s man­u­fac­tur­ing sec­tor will see con­tract this year as the global econ­omy slows down, ac­cord­ing to a forecast by the In­dus­trial Eco­nomic and Knowl­edge Cen­ter ( IEK) at the In­dus­trial Tech­nol­ogy Re­search In­sti­tute ( ITRI,

). Re­vis­ing its ear­lier forecast of a 0.86 per­cent an­nual in­crease, the IEK said Thurs­day that the sec­tor’s out­put will fall 1.74 per­cent to NT$ 18.66 tril­lion ( US$ 580 bil­lion) in 2015.

In 2014, the pro­duc­tion value of Tai­wan’s man­u­fac­tur­ing sec­tor in­creased 3.97 per­cent from a year ear­lier, ac­cord­ing to the IEK.

It said the global econ­omy ap­peared wob­bly, with de­mand for high- tech gad­gets weak­en­ing, which has af­fected Tai­wan’s ex­port- ori­ented econ­omy. Tai­wan’s weaker- than- ex­pected ex­ports bode ill for the de­vel­op­ment of the lo­cal man­u­fac­tur­ing sec­tor, the IEK said.

In ad­di­tion, lower in­ter­na­tional crude oil prices have un­der­mined Tai­wanese man­u­fac­tur­ers’ pric­ing power, which has af­fected the lo­cal petro­chem­i­cal seg­ment, IEK said. In the first half of the year, in­ter­na­tional crude oil prices dropped 47 per­cent year- on- year, the IEK said.

Mean­while, with main­land China in­creas­ing its ef­forts to build its own sup­ply chain in the high- tech in­dus­try, Tai­wan has been squeezed by the com­pe­ti­tion from Chi­nese firms.

Tai­wan reg­is­tered a yearon- year fall in ex­ports for the sixth con­sec­u­tive month in July, ac­cord­ing to the Min­istry of Fi­nance.

In the first seven months of the year, Tai­wan’s out­bound sales dropped 7.8 per­cent from a year ear­lier.

In the in­for­ma­tion and elec­tron­ics seg­ment, the IEK said, out­put is likely to rise by an an­nual 3.10 per­cent to NT$ 6.21 tril­lion in 2015. The growth forecast was cut from an ear­lier es­ti­mate of a 4.38 per­cent in­crease.

The re­search group said out­put in the me­tal and elec­tri­cal ma­chin­ery seg­ment is ex­pected to fall 3.0 per­cent an­nu­ally to NT$ 5.04 tril­lion in 2015, a re­vi­sion from an ear­lier forecast of a 1.5 per­cent in­crease.

The IEK pro­jected a 7.6 per­cent an­nual de­cline in the pro­duc­tion value of the chem­i­cal sec­tor to NT$ 4.96 tril­lion this year, re­vis­ing its ear­lier forecast of a 4.2 per­cent drop. The out­put of textile, food and other in­dus­tries is ex­pected to grow 1.95 per­cent an­nu­ally to NT$ 2.45 tril­lion this year, the IEK said.

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