Manufacturing sector major contributor to Taiwan's strong GDP

Taipei, Jan. 10 (CNA) The export-oriented manufacturing sector served as the major contributor to Taiwan's strong GDP growth in the first nine months of 2025, according to government statistics.

Recent data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed Taiwan's GDP grew a stunning 7.15 percent during the nine-month period, with the manufacturing sector contributing 4.89 percentage points, or 68 percent of the total growth, and the service sector contributing 1.76 percentage points, or 24 percent.

Tsai Yu-tai (蔡鈺泰), head of the DGBAS's Department of Statistics, said the electronics component and computer/optoelectronics industries benefited from solid global demand for AI applications, making the manufacturing sector the largest contributor to Taiwan's GDP.

In late November, the DGBAS raised its GDP growth forecast to 7.37 percent for 2025 and predicted the economy would grow another 3.54 percent in 2026, citing the continued AI boom.

Tsai, however, admitted the growth of the local manufacturing sector varied from industry to industry.

Tsai said the capital-intensive information and communications industry and the electronics industry were keen to raise wages in the AI era, but the number of people employed in those industries was relatively low, while the labor-intensive services sector largely saw flat growth.

Echoing Tsai, Wu Dach-rahn (吳大任), an economist at National Central University, said the strength of the manufacturing sector was uneven, with the old economy sector affected by the U.S. tariff measures.

According to Wu, the electronics industry in Taiwan employs only about 1 million people, compared with roughly 11 million workers nationwide.

At the same time, traditional industries continue to report furloughs.

Under such circumstances, Wu said, many local employees did not feel significant benefits from the GDP growth in Taiwan and consumer confidence remained weak.

In the service sector, the DGBAS said, the retail and wholesale industry's contribution to total GDP growth was 0.7 percentage points, and the financial/insurance industry's share was 0.29 percentage points in the first nine months of last year.

In particular, wholesale firms, especially machinery suppliers, benefited from AI business opportunities as their operations were largely correlated to robust exports, Tsai said.

He added that the financial/insurance industry was driven by the local stock market in terms of investment returns, as the benchmark index Taiex was also boosted by the AI frenzy in 2025, soaring 25.73 percent.