Taiwan: Industrial output posts quickest growth since July 2021 in January
Industrial output rose 16.0% compared to the same month of the previous year in January, which contrasted December’s 4.0% decrease and marked an end to 19 straight months of declines. Industry benefited from strong global demand for artificial intelligence applications, cloud-based data services, and high-performance computing devices. Looking at subsectors, the reading reflected a broad-based improvement, with activity in the manufacturing, electricity and gas supply and water supply sub-sectors all improving in January. However, the data was flattered by the timing of the Lunar New Year holiday (February this year vs January in 2023).
On a seasonally adjusted monthly basis, factory output rebounded, rising 1.4% in January (December: -2.3% mom). Meanwhile, the trend improved, with the annual average variation of industrial production coming in at minus 9.5% in January, up from December’s minus 12.5%.
Industrial production could fall in February as the Lunar New Year leads to reduced working days relative to February 2023. However, rising demand for AI and cloud applications, an upturn in electronics demand and a low base effect should support a rebound in industrial production in 2024 as a whole.