Industrial production up for 2nd straight month in August

Taipei-Industrial production for August rose more than 2 percent from a year earlier, marking the second consecutive month of year-on-year increase, on the back of strong growth in the electronics sector, the Ministry of Economic Affairs (MOEA) said Monday.

Data compiled by the MOEA showed that the industrial production index for August rose 2.28 percent from a year earlier to 115.29 after a 3.77 percent year-on-year increase in July.

The sub-index of the manufacturing sector, which accounted for more than 90 percent of Taiwan's total industrial production, also rose 2.11 percent from a year earlier to 115.03, the data indicated.

On a month-on-month basis, Taiwan's industrial production rose 1.68 percent and production of the manufacturing sector also grew 1.78 percent, the MOEA said.

After seasonal adjustment, industrial production for August rose 0.10 percent from a month earlier and production of the manufacturing sector also grew 0.34 percent from a month earlier, the MOEA added.

Wang Shu-chuan (???), deputy head of the MOEA's statistics department, said Taiwan's high-tech industry benefited from efforts to develop high-end technology, which helped the industry boost production, with semiconductor manufacturers the biggest beneficiaries of this trend.

As a result, the production sub-index of the electronic component industry for August rose 9.50 percent from a year earlier to 125.44, the highest level since October 2018, when the sub-index stood at 128.06, the data showed. The year-on-year growth was the biggest in 10 months.

Semiconductor manufacturers here saw their production rising 19.99 percent from a year earlier in August as international brands scrambled to build up inventories in preparation for the launch of new products, while solid demand for 5G applications also boosted integrated circuit production, the data indicated.

However, production in the flat panel sector fell 14.11 percent from a year earlier in August in reflection of a global supply glut at a time of production expansion in China, the MOEA said.

The ministry said production of the computer/computer peripheral and optoelectronics industry rose 33.25 percent from a year earlier to 169.79, a new monthly high, as Taiwanese companies were keen to allocate more resources at home in a bid to avoid the impact of the global trade disputes.

It was the 11th consecutive month in which the industry had posted double-digit production growth, the MOEA said.

Bucking the upturn, the old economy sector felt the pinch of the Washington-Beijing trade friction in August, with production of the base metal industry and machinery industry down 10.59 percent and 17.98 percent, respectively, from a year earlier.

In addition to uncertainty over global demand, the MOEA said, the chemical industry was also affected by annual maintenance, so its production in August fell 5.06 percent from a year earlier, the MOEA said.

It said that production in the auto and auto part industry fell 9.50 percent from a year earlier due to the ghost month taboo, which prevented many consumers from buying big ticket items such as cars and homes to avoid bad luck. Ghost month, the seventh month on the Lunar calendar fell during Aug. 1-29 this year.

In the first eight months of this year, Taiwan's industrial production fell 1.06 percent and the sub-index of the manufacturing sector dropped 1.18 percent, in reflection of weaker global demand amid the trade war, the MOEA said.

Looking ahead, Wang said that due to fewer working days in September, industrial production is expected to stay flat or rise only slightly from a year earlier.

Wang said that with more and more Taiwanese firms willing to invest more at home and tech companies pouring more funds into high-end technology development, Taiwan still has a chance to see industrial production rise from a year earlier for the whole of 2019.

Source: Focus Taiwan News Channel