Taipei--The government-sponsored Industrial Technology Research Institute's Industrial Economics and Knowledge Center (IEK) has raised its forecast for the output growth of Taiwan's manufacturing sector for 2017, as the global economy shows signs of improving.
According to a research report released by the IEK, the production value of the local manufacturing sector for 2017 could rise 2.52 percent from a year earlier to NT$17.32 trillion (US$550 billion). The latest growth forecast is higher than a previous estimate of a 1.52 percent rise.
In 2016, the output of the local manufacturing sector fell 3.97 percent from a year earlier amid weak global demand in the first half of the year.
The IEK said that with a rebound in the global economy, demand for Taiwan's semiconductor devices has been on the rise, which could serve as a driver for growth of the local manufacturing sector this year.
In 2016, production of Taiwan's semiconductor industry rose 7.5 percent from a year earlier to hit NT$2.43 trillion. The IEK said that the industry could see its output rise further by 7.2 percent in 2017.
The IEK added that international crude oil prices are expected to move higher to push up raw material prices, and the United States is expected to increase its investment in infrastructure after U.S. President Donald Trump was sworn in Friday, which could help the U.S. economy.
In addition, the government's efforts to push for its "New Southbound Policy," which aims to develop closer ties with the Association of Southeast Asian Nations (ASEAN) members and India, might lend more support to the local manufacturing sector in 2017, the IEK said.
The research group added that the government's initiatives to promote technology innovation in a wide range of industries such as green energy, smart machinery and biotech could be also helpful to Taiwan's manufacturing sector this year, the IEK said.
It said that output of the information/electronics industry could rise 3.47 percent in 2017, and production of the chemical industry is likely to grow 5.48 percent.
However, output of the metal/electrical industry could fall 0.6 percent year-on-year in 2017, the IEK said.
As for the local auto industry, it said, output could rise 4.4 percent-5.4 percent in 2017, as the industry has been keen to develop automotive electronics, which are perceived as value- added devices for the auto industry.
Despite an upbeat mood about the local manufacturing sector, the IEK said that Taiwan should remain cautious about the possible impact resulting from Trump, who strongly supports protectionism, determined to put "America First" on his agenda.
The IEK said that a move by the United Kingdom to kick off an exit from European Union from March and the U.S. Federal Reserve's rate hike cycle are likely to affect the global economy.
Source: Focus Taiwan News Channel