Taiwan June industrial output slips but at slower pace

24, Jul. 2019

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TAIPEI, NNA – Industrial production in Taiwan continued to decline in June as the U.S.-China trade dispute weighed on global growth, but at a slower pace than in the previous month.

The Ministry of Economic Affairs released the latest industrial production data on Tuesday.

Key points:

―― Industrial production dipped 0.4 percent from a year earlier in June after slumping 2.6 percent in May and rising 1.4 percent in April. Declines in manufacturing and mining were partly offset by gains in utilities.

―― In the first six months of the year, factory output dropped 2.5 percent.

―― Among the sub-sectors of the manufacturing sector, production of electrical parts and components rose 2.8 percent after falling for the previous six months. It was mainly due to a 9.0 percent gain in the integrated-circuit segment, thanks to inventory drawdowns and growing orders for advanced contract chip-making. However, the increase was partly offset by sluggish demand for DRAMs (dynamic random access memories).

―― Output of computer electronic and optical products jumped 23.2 percent, posting double-digit percentage growth for a ninth straight month, bolstered mainly by expanded production capacity of server, switch and router manufacturers, as well as robust demand for auto electronics, fifth-generation (5G) telecommunication devices and semiconductor detectors.

Takeaway:

―― The ministry’s survey of manufacturers showed 11.9 percent project an increase in July while only 2.1 percent had expected a gain in June. 73.0 percent of those surveyed forecast flat output in July.

―― Taiwan’s manufacturing production is likely to pick up in the second half of the year on planned releases of new consumer electronics, application development of 5G infrastructure, artificial intelligence and the Internet of Things, the ministry said in a statement. Some manufacturers are also expanding domestic production despite global uncertainty, it said.