Manufacturing output forecast to shrink in 2015
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.