ITRI : Manufacturing production value to rise 10%

Jun 06, 2021

The institute raised its forecast as it expects demand for electronics and steel products to increase as global economies recover

The Industrial Technology Research Institute (ITRI, 工研院) has raised its growth forecast for the production value of Taiwan’s manufacturing industry to 10 percent for this year, more than double the estimate of 4.75 percent it made in November last year, as local producers benefit from the robust demand for steel, chips and electronics amid a global economic recovery.

The information and communications technology (ICT) industry would advance by 11.4 percent to NT$8.55 trillion (US$308.6 billion) this year, outpacing its previous estimate of 3.55 percent growth, the institute said in a report released yesterday.

“Strong inventory rebuild demand is adding pressure to an already tight supply of ICT products. Average selling price hikes should help boost the profit margins of local manufacturers,” it said.

Shipments of electronics, primarily smartphones, are forecast to increase 9.5 percent this year, compared with its previous forecast of 5.4 percent, driven by work-from-home, online learning and stay-at-home trends.

“Some manufacturers have upgraded equipment or added production lines to cope with the rising demand,” the institute said, adding that a surge in COVID-19 cases and a soft lockdown in Taiwan have not affected the sector, which mainly relies on outbound demand.

The production value of basic metals and machine tools is forecast to rise 10.15 percent to NT$5.67 trillion this year, it said, up from its previous projection of 4.28 percent growth, as China and other countries invest heavily in infrastructure projects to stimulate their economy, boosting steel demand.

The petrochemical industry’s output would grow 12.5 percent to NT$4.2 trillion this year, as an improving global economy pushes up demand for and prices of crude oil and petrochemical products, it said.

However, the production value of the livelihood sector — including restaurants, retail, textile and tourism-related businesses — would feel the pinch of a setback in domestic demand, with the institute predicting its output would grow 1.48 percent to NT$2.5 trillion this year, down from its previous estimate of 2.5 percent growth.

On a more positive note, the apparel and textile industry would post a strong recovery, as companies see increasing orders from global brands, while robust domestic investment would underpin the sector’s growth, it said.

Source: Taipei Times