Taiwan’s machinery exports shrank 2.9 percent from a year earlier to US$2.86 billion in October due to a slowdown in global economic growth, the Taiwan Association of Machinery Industry (TAMI) said Wednesday in a report.
The global economic slowdown due mainly to strong inflation and rising interest rates has caused businesses to reduce capital spending on machinery equipment, TAMI indicated, adding that as a result, new export orders in the second half of this year will be lower than in the first half.
Local machinery makers recorded exports of US$2.86 billion last month, up 10.63 percent from September, but down 2.9 percent from a year earlier, according to TAMI’s report on Taiwan’s machinery imports and exports in October released Wednesday.
The year-on-year fall in exports in October was due to sluggish demand for machinery equipment amid a slowing global economy, TAMI said.
In the first 10 months of the year, Taiwan’s machinery exports totaled US$29.48 billion, up 8.6 percent year-on-year, according to TAMI.
Meanwhile, as China’s zero-COVID policy has taken a heavy toll on its economy, Taiwan’s machinery exports to the mainland slid 10.3 percent to NT$7.68 billion during the period, according to the association.
In contrast, machinery exports to the United States rose 40 percent year-on-year in the first half of this year, it said.
However, exports to the U.S. in August increased only 3.2 percent from a year earlier to US$696 million, while declining 7.5 percent in September before surging 6.3 percent in October.
This shows foreign businesses are becoming more conservative when it comes to investing in machinery equipment amid a slowing global economy, the association said.
Looking to the second half of this year, TAMI said that as the U.S. Federal Reserve is unlikely to pivot from its hawkish interest rate policy and there is no sign of an end to the Russia-Ukraine war, demand for machinery equipment in the second half of the year is expected to be weaker than the first half.
In addition, other factors affecting international economic growth are also pushing down demand and will continue to hurt exports into the first half of next year, TAMI added.
TAMI forecast that machinery exports will grow 5 percent to 10 percent in value for the whole of 2022.
Source: Focus Taiwan News Channel