Manufacturing Industry to Grow 4.75% in 2021: ITRI IEK

Taiwan's 2021 manufacturing forecast suggests next year's industry value hit NTD$19.68 trillion, according to the Industrial Technology Research Institute (ITRI) ​​Industrial Economics and Knowledge Center (IEK).

IEK reported an industry growth rate at 4.75%, with sectors like metal electromechanical, information electronics, chemical industry, and livelihood industry indicating positive growth. However, IEK suggested industries to hold a conservative yet optimistic outlook.

However, with the pandemic disrupting the global supply chain, ITRI recommends that Taiwan should adapt to the new trends of decentralizing and diversifying production hubs.

ITRI's IEKCQM forecast team pointed out that with countries reopening and lifting restrictions, the global economy is ramping up again, buoyed by governments rolling out subsidies and stimulus packages. At the same time, new emerging technology continues to develop. These factors would help build consumer confidence and prompt firms to expand investment and build momentum for Taiwan's manufacturing economy.

At the moment, the lockdown policies earlier this year have stifled production, consumer habits, investment, and trade. The global economic performance has yet to return to pre-COVID levels; however, factors like the winter season approaching and lockdown measures re-introduced in many countries are unstable elements that produce uncertainty in 2021.

IEK's analysis indicated that the pandemic's impact on the electromechanical metal industry is clear to see in the World Steel Association's estimations. Global steel demand fell to 1.654 billion tons in 2020, but the association is optimistic that those numbers will rise to 1.717 billion tons next year.

Demand in the global agricultural and construction machinery equipment and automotive sectors is resurging, with expectations to propel growth in the electromechanical metal industry; IEK forecasts the industry value to hit NTD$5.19 trillion, signaling an increase of 4.28%.

For information electronics, IEK expects stable growth as 5G, AI, HPC, and IoT to bolster the sector. External factors such as the trade and technological tensions between the U.S. and China are the industry's primary concerns. IEK estimates the information electronics value to reach NT$8 trillion next year, marking a 3.55% growth.

The OPEC's decision to reduce production, countries lifting restrictions, and demand growth in the downstream market, has helped the chemical industry get back to its feet. However, the EIA expects oil prices to see negative impacts in 2021. Stimulus packages and China's economy opening up are both factors advantageous to Taiwan's chemical industry. IEK forecasts the industry value to reach NTD$4.05 trillion next year. Its 9.35% growth is also the biggest among all four mentioned sectors.

The livelihood industry saw the most impact from the disrupted global production chain, as global market demand weakened. Taiwan's textile industry saw the biggest impact. However, economies opening up and consumer confidence ramping up have bolstered tourism, public transportation, and catering sectors. IEK estimates the industry to reach NTD$2.45 trillion, marking a 2.50% growth in 2021.