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Industrial production growth lower than expected in June

2018/07/23 20:58:06

Taipei, July 23 (CNA) Industrial production in Taiwan rose for the fourth consecutive month in June, but at a rate of growth that fell short of expectations, the Ministry of Economic Affairs (MOEA) said Monday.

The industrial production index edged up 0.36 percent from a year earlier to 107.81, but the rise was lower than the 3 percent growth expected by the MOEA, according to Wang Shu-chuan (王淑娟), deputy head of the MOEA's statistics department.

The June figure for the index was also well below the 7.61 percent year-on-year growth seen in May, raising questions if it was an aberration or a sign of things to come.

Wang suggested the June result was just a blip, attributing it to the reduced number of working days in the month because of the Dragon Boat Festival and adjustments of inventories by some semiconductor companies, hurting orders and production.

She remained cautiously optimistic about Taiwan's industrial production for the rest of the year and that it would continue the momentum shown of having risen 25 of the last 26 months.

Manufacturing production should grow about 5 percent year-on-year in 2018, she said, but she cautioned that trade friction between the United States and China could hurt the world economy and global demand.

In the first six months of the year, Taiwan's industrial production rose 4.57 percent from a year earlier with the sub-index for the manufacturing sector up 4.74 percent year-on-year, the MOEA said.

In June, the manufacturing sub-index, which accounts for more than 90 percent of total industrial production in Taiwan, rose 0.68 percent from a year earlier, compared with a 7.24 percent increase in May.

Production of electronics components rose 1.55 percent year-on-year as a wider range of applications in new tech applications boosted demand for semiconductors, including silicon wafers, DRAMs, and flash memory chips, the MOEA said.

Semiconductor production was up 2.43 percent during the month, while flat panel output was down 5.60 percent because of a drop in the number of large-sized screens produced, the MOEA said.

The production of the computer/optoelectronics sector rose 2.69 percent from a year earlier on the back of rising demand for internet and communications equipment, computer peripherals, projectors and customized notebook computers, the MOEA said.

The highest growth was seen in the machinery sector, as production rose 9.17 percent in June as manufacturers in many global industries, including the semiconductor, optoelectronics and aviation sectors, continue to push for greater automation, according to the MOEA.

But chemical production fell 2.20 percent in June from a year earlier, ending a 13-month run of growth as some petrochemical firms suspended production due to annual maintenance.

Production in the auto/auto parts industry was down 10.17 percent as local car makers adjusted their inventories and faced rising competition from imported cars.

(By Liao Yu-yang and Frances Huang)