Taiwan’s industrial production plunged in March, weighed down by a manufacturing sector struggling to overcome a slump in global demand.
(Bloomberg) — Taiwan’s industrial production plunged in March, weighed down by a manufacturing sector struggling to overcome a slump in global demand.
Industrial output shrank 14.5% last month compared to a year ago, the Economics Ministry said in a statement Monday. Economists surveyed by Bloomberg had forecast a 12.3% drop.
March’s decline was the biggest contraction since May 2009 — in the direct aftermath of the global financial crisis — for any month other than January and February.
Those months are often distorted by the Lunar New Year holiday. This past January, for example, saw industrial production drop 21% due in part to the holiday reducing the number of working days in the month.
While output in the electricity sector also shrank, the main drag was from Taiwan’s increasingly idle factory floors. Manufacturing production fell 15.2%. Taiwan Semiconductor Manufacturing Co., the economy’s largest company, foreshadowed the news in its first-quarter earnings call last week, saying lower capacity utilization had weighed on its gross margin.
TSMC and last week’s data on export orders offer little hope of an immediate turnaround for Taiwan’s factories. The chipmaker’s chief financial officer Wendell Huang said it was a “reasonable view” that TSMC’s capacity use will only start rebounding in second half of the year.
Taiwan’s chip output declined 18.9% in March, the Economics Ministry data show.
Meanwhile, Taiwan’s export orders, often a good indicator of future manufacturing output, plunged in March by the most since 2009 as global demand for semiconductors showed little sign of improving.
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