TAIPEI: Industrial output last month contracted at a faster-than-expected annual rate of 4.06 percent as a faltering global economy curtailed demand, boding ill for the outlook of the nation’s manufacturing activities next quarter, the Ministry of Economic Affairs said yesterday.
The ministry had expected industrial output to return to growth next quarter, but a “capricious global economy makes it more difficult to forecast,” Department of Statistics Deputy Director-General Yang Kuei-hsien told reporters on the sidelines of a news conference.
The ministry only has low visibility, Yang said, adding that: “We expect the decline in industrial output to shrink to minus-2 percent annually this month, benefiting primarily from an improvement in the semiconductor sector.”
The semiconductor sector this month is expected to swing back to growth for the first time in nine months, thanks to robust chip demand for high-end smartphones ahead of new model launches and medium-to-low-range 4G smartphones in emerging nations, Yang said.
Rising demand for sensor chips used in Internet of Things applications is also expected to help drive growth, he said, adding that the uptick in crude oil prices and steel prices would also help boost industrial production.
However, this month the slump in the nation’s industrial output is to extend to a 13th consecutive month of decline based on the ministry’s forecast, which would surpass the index’s previous recession during the global financial meltdown in 2008 and 2009, when the nation witnessed 12 months of contraction in industrial output.
The manufacturing sector’s production last month dipped 4.5 percent year-on-year, due to sagging demand and intensifying competition.
Within the manufacturing sector, the electronics components segment, which accounted for the biggest portion of manufacturing output, slipped 3.22 percent annually, dragged down by the LCD subsector’s 11.72 percent decline.
Computer production and the optical sector fell 5.17 percent annually last month, as weak demand for smartphones curbed demand for camera lenses, the ministry said.
However, output of virtual-reality and wearable devices increased due to new product launches, it said.
The production of basic metals rose 0.26 percent, as a rebound in global steel prices stimulated inventory restocking demand.
The basic metals sector was the only one among the five manufacturing sectors that registered growth last month, ministry statistics showed.
Separately, the nation’s wholesales last month dropped 5.8 percent year-on-year to NT$767.6 billion (US$23.51 billion), mainly due to a decline in purchases of notebook computers and LCD TVs from Japan, as well as a decline in the purchase of chips, memory chips and LCD panels.
Retail sales grew 2.3 percent annually to NT$327.9 billion, beating the ministry’s expectations.
The ministry expected retail sales to remain flattish last month because of bad weather.
The ministry attributed the growth to a long Tomb Sweeping Day holiday and early promotional sales for Mother’s Day, which boosted department store and supermarket sales.
Retail sales are expected to grow 2 percent annually this month, Yang said.
Restaurant sales last month rose 3 percent annually to NT$33.9 billion, as demand picked up due to long holidays and sales of cold drinks increased with rising temperatures, the ministry said.
The ministry expects restaurant sales to expand 2 percent annually this month.
