Taiwan: Industrial production decelerates in October

Industrial production increased 3.7% in October from the same month last year, moderating from the revised 4.6% expansion recorded in September (previously reported: +5.0% year-on-year).

Manufacturing production—which contributes 93% to overall industrial output—expanded 5.7% annually in October (September: +6.0% yoy). Conversely, mining and quarrying contracted at a double-digit rate again in October (October: -16.9% yoy, September: -12.3% yoy) and activity in construction deteriorated further.

A month-on-month comparison shows that industrial output expanded a seasonally-adjusted 1.6% in October, which contrasted September’s 1.0% increase. The trend suggests that the ongoing slow recovery in the sector continues, as the annual average variation in industrial production rose from minus 1.5% in September to minus 0.7% in October.

Analysts participating in our Consensus Forecast expect that industrial production will continue to recover in the coming months. They expect industrial production to contract 0.2% in 2016, which is up 0.3 percentage points from last month’s forecast. For 2017, participants expect industrial output to rebound and expand 2.1%, which is up 0.1 percentage points from last month’s forecast.