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Taiwan Industrial production June 2023

Taiwan: Industrial activity drops again in June

Industrial output fell 16.6% in year-on-year terms in June, which was larger than May’s 15.7% decrease, undershot market expectations and marked the 13th straight month of contraction. Looking at the details of the release, June’s drop was largely driven by a fall in manufacturing output. In addition, production shrank in both the electricity and gas supply, and water supply sub-sectors.

On a seasonally adjusted monthly basis, industrial output fell 0.7% in June (May: +3.0% mom). Meanwhile, the trend pointed down, with the annual average variation of industrial production coming in at minus 12.1%, down from May’s minus 10.9%.

Over H1, industrial output fell close to 18% in annual terms. Weak global electronics demand and firms drawing down their inventories have hurt activity in recent months. Looking ahead, the decline in industrial output should soften as the base effect grows more favorable, although a steep decline is still forecast over 2023 as a whole.

On the outlook, EIU analysts said:

“The latest string of high-frequency Taiwanese economic data suggests that overseas restocking demand will remain elusive until late 2023. We expect those factors eventually to narrow the contraction in industrial production and export growth over the latter part of the year, particularly as global electronics demand firms.”

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