Taipei--The government-sponsored Industrial Technology Research Institute's Industrial Economics and Knowledge Center (IEK) has raised its forecast for growth in production value in Taiwan's manufacturing sector for 2017 because of a recovery in the global economy.
The IEK said that the output of Taiwan's manufacturing sector for 2017 will rise 3.2 percent from a year earlier to NT$17.43 trillion (US$573 billion). That's an upgrade from its previous estimate of a 2.52 percent rise made in January.
With the world's economy on the way to a recovery, the IEK said, prices of raw materials such as crude oil prices have stabilized and even rebounded, which has reduced the risks of a fall in export value.
Under such favorable circumstances, Taiwan's manufacturing sector has enjoyed stable growth conditions, the IEK said.
In terms of industries within the sector, the IEK said that the production value of the local information and communications technology (ICT) industry is expected to grow 3.96 percent from a year earlier to NT$6.22 trillion in 2017 on the back of rising demand for high-tech devices from end-users.
The research group said that declines in notebook and tablet computer sales are likely to moderate this year, and the manufacturing activity of China, the second largest economy in the world, is expected to grow at a stable pace, which could lend support to Taiwan's ICT industry this year.
As for the local petrochemical industry, the IEK said that the output growth is expected to range between 7.2 percent and 7.8 percent in 2017 at a time when international crude oil prices have turned stable and could range between US$50 and US$55 per barrel in the year.
The IEK said that recovering oil prices which got a boost from an output deal between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, that became effective in January, are expected to boost the profitability of downstream petrochemical producers in Taiwan, helping them maintain the kind of steady growth seen in the previous two years.
But the IEK warned that the local petrochemical industry will encounter some headwinds such as an industrial structure reform in China which is expected to affect petrochemical product imports from Taiwan, and an increase in ethylene production in the U.S. market which could lead to a global oversupply.
The IEK said that while the local manufacturing sector will grow at a faster pace this year, the government should help manufacturers upgrade their operations and productivity by making efforts to develop the Internet of Things and artificial intelligence.
The research group said that at a time of rising awareness of environmental protection which has produced difficulties for the petrochemical industry to expand, the government also has to lead the local petrochemical industry to use energy-efficient raw materials for production and roll out value-added products.
Source: Focus Taiwan News Channel