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Industrial production down for 15th straight month in August

09/23/2023 08:43 PM
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A robotic manufacturing equipment for a factory assembly line is showcased at an exhibition in this CNA file photo.
A robotic manufacturing equipment for a factory assembly line is showcased at an exhibition in this CNA file photo.

Taipei, Sept. 23 (CNA) Taiwan's industrial production fell by more than 10 percent from a year earlier in August, marking the 15th consecutive month of a year-on-year decline as the exports-oriented local economy continued to feel the pinch from weak global consumer demand, the Ministry of Economic Affairs (MOEA) said Saturday.

Data compiled by the MOEA showed the country's industrial production fell 10.53 percent from a year earlier to 91.38 after a 15.46 percent year-on-year fall in July.

The past 15 conservative months of decline was the longest ever period of year-on-year contraction in history.

The sub-index of the manufacturing sector, which accounts for more than 90 percent of the total industrial production in Taiwan, also moved lower in August by 10.7 percent from a year earlier to 90.74.

That marked the 15th straight month of a year-on-year fall for that sector, also the longest-ever period of contraction in manufacturing, data indicated.

On a month-on-month basis, however, the local industrial production index rose 7.28 percent, with the sub-index for the manufacturing sector also rising 7.86 percent, the MOEA said.

As for the first eight months of this year, Taiwan's industrial production fell 16.49 percent from a year earlier, while production in the manufacturing sector shed 17.10 percent year-on-year.

The MOEA said that as the pace of the global economic recovery remained slow, that has kept demand from end-users weak and prolonged inventory adjustments in the world's supply chains.

The electronics component industry meanwhile posted a 16.78 percent decline from a year earlier in production in August as semiconductor suppliers, including pure play wafer foundry operators and memory chip suppliers saw reduced production in response to continued inventory adjustments.

Speaking with reporters, Huang Wei-jie (黃偉傑), deputy head of MOEA's Department of Statistics, said semiconductor suppliers remained affected by a fall in demand for consumer electronics gadgets.

The silver lining was that production by large-sized flat panel makers increased to meet a year-end buying spree, which had offset the impact resulting from overall global demand on the electronics component industry, Huang said.

The MOEA said the computer and optoelectronics industry bucked the downtrend, reporting a 2.83 percent year-on-year increase in production in August on the back of solid demand for cloud and data center applications as well as artificial intelligence related gadgets.

As for the old economy sector, the MOEA said, many companies, in particular in the semiconductor industry, scaled back investments for expansion so that the machinery industry saw production falling 16.65 percent from a year earlier in August.

Despite inventory adjustments, the chemical raw material and fertilizer industry showed some resilience, with production falling only 0.53 percent from a year earlier in August as a spike in international crude oil prices boosted product prices, the MOEA said.

The base metal industry also appeared resilient with its production rising 0.78 percent from a year earlier in August as major steel producers launched promotional campaigns to boost buying, while a relatively low comparison base over the same period of last year also lent some support, the MOEA added.

The auto and auto parts industry continued to benefit from an increase in car sales as auto brands unveiled new models and launched promotional campaigns, registering a 1.30 percent year-on-year increase in production in August, according to the MOEA.

Huang said while peak season effects are expected to help the tech industries to register a month-on-month increase in production for the rest of the year, year-on-year contraction is likely to continue, but the decline is likely to moderate after a long period of inventory adjustments.

He said the MOEA expects production in the manufacturing sector to fall 6.4-10.6 percent from a year earlier in September.

(By Liu Chien-ling and Frances Huang)


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