Manufacturing Industry Will Score Upturn in 2nd Half: TIER

Taipei, May 23, 2012 (CENS)--Taiwan Institute of Economic Research (TIER) predicted yesterday (May 22) that Taiwan's manufacturing industry will remain in the realm of yellow-blue light in the second quarter, which will rise to green light for both the third and fourth quarter.

Sun Min-teh, director of business forecast center, TIER, remarked that the manufacturing industry will not recover until the second half this year.

This is the first time for TIER to release forecast of the performance of the manufacturing industry, which is also based on a lighting system, similar to the one embraced by the Council for Economic Planning and Development (CEPD) for forecasting Taiwan's overall economic performance.

Sun pointed out that thanks to the rollout of new products, the electronic components industry will perform best among medium-category industries by flashing a red light in the second half, the only industry to do so. For major-category industries, transportation industry will perform worst and will flash a yellow-blue light from the second through the fourth quarter, down from green light in the first quarter. Auto sales will underperform last year.

Sun noted that the launch of new operating system will fuel a new wave of demand and both Apple and non-Apple camps will have to purchase components and parts from Taiwan. In addition, business of the electronic components and parts industry was bad in the second half last year and the low comparison base will enable the industry to rack up robust growth in the second half. Since the electronic components and parts industry has a large share in the manufacturing industry, its upturn will boost the overall performance of the manufacturing industry.

Oil-price hike will dampen demand for autos and the slow economic recovery of Europe, the U.S., and mainland China will also affect export of auto parts and components. As a result, Sun expected auto firms to revise downward their sales forecast this year.