Machinery production rebounds in March
Manufacturing activity in Taiwan showed signs of recovery in March. Orders rose 1.92 billion, which is in line with average monthly order of 1.9-2.0 billion.
Wang Cheng-ching, secretary general of the Taiwan Association of Machinery Industry (TAMI), said, “The market has bounced back. There will be a significant improvement in orders and shipments in Q2.
Besides, the value of New Taiwan dollar has fallen more than that of Japanese yen and South Korean won lately. The sharp currency devaluation would make Taiwan exports appear cheaper and more competitive.”
Wang thinks the economy is likely to turn around in the second half of this year.
According to a trade statistics report by the Machinery Association, Taiwan’s machinery exports in the first quarter amounted to $ 4.89 billion, a 9.1% decline over last year. Valuation went up to NT$ 1.62 billion, representing a decrease of 4.7% from a year earlier.
However, several manufacturers, including FFG, Tongtai , Goodway, AWEA, YCM, Victor Taichung, LEADWELL, Takisawa (Taiwan), and Kao Fong Machinery, all received rush orders following the Chinese New Year holidays.
Orders in February and March improved markedly. Hiwin, for instance, which supplies balls crews and linear guideways, received more orders during those months than at the beginning of the year
Wang said, “The amount of orders in March rose to $ 1.92 billion. With exports of $20.1 billion during the same month and monthly export average of $ 1.675 billion last year, it shows that the market has touched bottom.
In addition, the yen, won, New Taiwan dollar, and other Asian currencies have suffered losses against the U.S. dollar recently. However, the rise in yen and won against the dollar has been higher than that of the New Taiwan dollar. The depreciation of the Taiwan currency is favorable for our machinery exports.
Following the machinery exhibitions in Shanghai and Seoul in April, the economy is likely to bottom out in the second quarter of this year.”
Some domestic manufacturers experienced an increase in shipments of mobile phone processing machines in the past month.
Huang said that sales of Samsung S6 performed poorly last year so some big orders for machinery didn’t materialize. However, sales of Samsung S7 recently did well, thus resulting in some parts suppliers’ increased purchase of capital machinery.
Q2 orders and shipments are expected to outperform that in the first quarter. But they may not do as well compared to the same period of last year, which saw orders and shipments hit record highs.
“The machine tool market has touched bottom in Q1 so the economy might improve in the second half of this year. We have reservations, however, about an economic surge in the second half of this year,” said both FFG chairman Chu Chih Yang and Takisawa general manager Winston Tai. “Q2 growth now looks more likely,” added Tai.