Taiwan: Industrial production recedes in February due to the Lunar New Year
March 26, 2018
Industrial output fell 1.9% in annual terms in February, markedly down from the revised 10.7% expansion registered in January (previously reported: +10.9% year-on-year). This reading came in below analysts’ expectations of a 1.7% growth rate. However, it should be pointed out that this weak reading was in large part due to the Lunar New Year, which occurred in February this year instead of January, as was the case in 2017. As a result, there were fewer working days in February 2018 compared to last year. Conversely, the same effect was behind the very large year-on-year expansion recorded in January. Taking January and February production numbers together yields a growth rate of 4.6% compared to the same period last year.
Looking at sub-components of the index, manufacturing production, which accounts for more than nine-tenths of total industrial output, declined 2.9% year-on-year in February, after a 10.6% yoy expansion in January. Meanwhile, mining and quarrying activity declined, utilities output grew moderately, and the construction sector surged.
With the large swings in the annual data because of the Lunar New Year, seasonally-adjusted figures offer a complementary view of the performance in the industrial sector. On a seasonally-adjusted basis, industrial output grew 1.2% over the previous month in February, marking an acceleration from January’s revised 0.9% growth (previously reported: 1.0%). Annual average growth in industrial production slowed from January’s 3.7% to 2.6% in February.
Author: Joffrey Simonet, Economist