Manufacturing sector’s output falls for 3rd straight quarter in Q3

Taipei-The production value of Taiwan's manufacturing sector fell year-on-year in the July-September period for the third consecutive quarter, due to a slower global economy, amid trade frictions between the United States and China, the Ministry of Economic Affairs (MOEA) said Tuesday.

While the old economy business sector saw a fall in raw material prices caused by the global trade issues, the high-tech industry generally benefited from an increase in investments in Taiwan as entrepreneurs sought to avoid the fallout from the Washington-Beijing tariff war, the MOEA said.

The output of Taiwan's manufacturing sector totaled NT$3.37 trillion (US$110 billion) in the third quarter, down 7.01 percent from a year earlier, after a decline of 4.95 percent and 4.57 percent, respectively, in the first and second quarters, according MOEA data.

In the third quarter, the computer and optoelectronics industry posted NT$207.2 billion in production value, an increase of 25.85 percent from a year earlier and its highest growth since the third quarter of 2011 when it was 32.51 percent, the MOEA data showed.

The strong third-quarter output growth in the computer and optoelectronics industry was driven by rising demand for 5G equipment and also an increase in investments by manufacturers trying avoid the higher tariffs imposed by the U.S. on Chinese goods, according to the MOEA.

In the electronics component industry, however, output dropped 3.81 percent year-on-year to NT$940.6 billion in the third quarter, as falling product prices continued to affect flat panel manufacturers, the MOEA data showed.

Those results were offset by a strong showing in the integrated circuit business, which saw a 5.13 percent year-on-year increase in output to NT$396 billion in the third quarter, the MOEA said.

The old economy industries, meanwhile, continued to be affected by global trade tensions, which prompted buyers to put their purchase plans on hold and sent product prices lower, the MOEA said.

The output of the chemical raw materials, base metal, and machinery industries fell 23.95 percent, 13.41 percent and 13.22 percent, respectively, from a year earlier to NT$400.7 billion, NT$338.1 billion and NT$159.2 billion in the third quarter, the MOEA data showed.

Production value in the automobile and auto parts industry also declined in the third quarter, falling 4.04 percent from a year earlier to NT$84.4 billion and registering a year-on-year drop for the eighth consecutive quarter, the data indicated.

In the first nine months of the year, the production value of the local manufacturing sector fell 5.54 percent from a year earlier to NT$9.86 trillion, the MOEA said.

Wang Shu-chuan (???), deputy head of the MOEA's statistics department, told reporters the with raw material prices unlikely to rebound anytime soon, fourth-quarter output can be expected to fall, but the decline might not be steep, as that is usually a peak season in the electronics industry.

She forecast a year-on-year decline in output for the whole of 2019.

Source: Focus Taiwan News Channel