Industrial production dips for second straight month

11/23/2022 10:40 PM
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Taipei, Nov. 23 (CNA) Taiwan's industrial production index dropped 3.56 percent in October from the same month a year earlier to 130.77, registering its second consecutive year-on-year monthly decline, the Ministry of Economic Affairs (MOEA) said Wednesday.

The sub-index for the manufacturing sector, which accounts for more than 90 percent of the country's industrial production, fell 3.40 percent year-on-year to 132.78 in October, also the second consecutive year-on-year monthly drop, the ministry said in a statement.

In the first 10 months of the year, industrial production rose 2.58 percent from a year earlier to 133.63, while the sub-index for the manufacturing sector grew 2.71 percent year-on-year to a new high of 135.79, according to the MOEA.

The decline in the manufacturing sub-index in October was caused by rising inflation and interest rates in major countries around the world, which dented demand in end markets, said Huang Wei-chieh (黃偉傑), deputy director of the MOEA's Department of Statistics.

The drop was also due to inventory adjustments by clients which have led to many manufacturers turning cautious about equipment investment, as well as a high base of comparison for the same period last year, Huang said.

Looking at specific industries in October, the production sub-index for electronic component makers rose 2.97 percent from a year earlier to 172.33, the highest ever for the month, due to the launch of new international-brand smartphones and strong demand for chips used in high-performance computing applications which boosted semiconductor production growth by 14.28 percent, Huang said.

Amid robust demand for data center equipment, the computer and optoelectronics sector production sub-index rose 13.53 percent from a year earlier to 213.25 in October, the MOEA said.

Among old economy industries, the chemical raw materials sector and the base metals industry saw their production sub-index decline 22.15 percent and 21.14 percent, respectively, from a year earlier largely due to weak demand, the MOEA said.

However, the auto and auto parts sector bucked the downward trend seen among old economy industries, recording a 3.79 percent year-on-year increase due to the brisk sales of new models in Taiwan's vehicle market, the MOEA said.

Huang indicated that he expects manufacturing production to maintain its growth momentum due to strong demand for emerging apps such as 5G, high-performance computing (HPC) devices and automotive electronics.

However, the continued pressure of global inflation and interest rate hikes, the ongoing war between Russia and Ukraine and China's zero-COVID policy, could hurt Taiwan's manufacturing production in November, according to Huang.

The MOEA estimated that Taiwan will see a 5.9 percent to 8.8 percent year-on-year fall to 117.85-131.85 in the manufacturing sector sub-index in November, Huang said.

(By Cheng Hung-ta and Evelyn Kao)

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