Taiwan Machinery Exports Slump For 17th Straight Months From Foreign Exchange Woes
Taiwan machinery exports last month fell 3.8% year-on-year, dropping for a 17th straight months as the local manufacturers struggled with macroeconomic headwinds and unfavourable foreign exchange rates, the Taiwan Association of Machinery Industry reported.
Source: Taipei Times
Taiwan machinery exports — comprising inspection and testing of equipment, electronic equipment and machine tools — totaled US$2.62 billion (US$84.14 million) last month, down from US$2.72 billion a year earlier, but up from US$2.49 billion the previous month, data compiled by the association showed.
The annual decrease in machinery exports continued to shrink over the past two months, suggesting a positive growth in overall shipments is around the corner for the industry, the report said.
However, exports of machine tools last month registered negative growth for the 11th consecutive month with an annual decrease of 19.8%, an indication that makers of machine tools remained victims of geopolitical tensions, macroeconomic weakness and the sharp depreciation of the Japanese yen, it said.
As global competition for orders becomes increasingly fierce, foreign exchange rates have become a key factor affecting Taiwanese manufacturers’ ability to secure orders, the association said, adding that the government should keep a close eye on the exchange rates of rival nations.
The NT dollar last year depreciated 1.03% against the US dollar, while the won declined 4.22%, the yuan 3.51% and the yen 10.33%, it said. For the whole of last year, machinery exports slid 15.3% year-on-year to US$29.47 billion, the report said.
Production value in the machinery industry also decreased 16.5% to NT$1.21 trillion from the previous year, it said. By product, exports of machine tools last year fell 14% from a year earlier to US$2.3 billion, overseas shipments of electronic equipment decreased 6.1% to US$4.76 billion and those of inspection and testing of equipment dropped 6.1 percent to US$4.61 billion, the report said.
China and the US were the two largest buyers of Taiwanese machinery last year at US$6.93 billion each, equally with a 23.5% share of the nation’s total exports, followed by Japan, with purchases totaling US$2.38 billion and accounting for 8.1%. Local machinery makers remain conservative about their business outlook this year as the overall manufacturing industry has not completely come out of the woods and firms are cautious about investing in machinery equipment, the report said.
The association said it would seek support from its Chinese counterpart to persuade Beijing from implementing new trade measures against Taiwan — such as suspending tariff concessions on several products including machinery under the Economic Cooperation Framework Agreement early harvest list — as the deal is mutually beneficial to the machinery industry on both sides of the Taiwan Strait.
Local manufacturers should make more efforts to expand their presence in other markets such as the US, Mexico and the Middle East to diversify their risk, it said.
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