Taiwan’s first industrial output fall in 2.5 years sign ‘Asia is slowing down’, with ‘darker picture’ ahead

Taiwan’s industrial output index lost 4.8 per cent last month compared to a year earlier following 31 months of year-on-year growth

Production in South Korea and Singapore has also eased due to weak consumer demand caused by the war in Ukraine, high inflation and fallout from China’s zero-Covid policy

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Taiwan’s industrial output index lost 4.8 per cent last month compared to a year earlier following 31 months of year-on-year growth. Photo: Shutterstock

Published: 6:31pm, 25 Oct 2022Updated: 4:07pm, 3 Nov 2022

Taiwan’s industrial output fell for the first time in more than two and a half years in September, signalling trouble in major world markets that traditionally rely on the technology hardware hub as well as for other export-reliant Asian economies.

The self-ruled island’s industrial output index lost 4.8 per cent last month compared to a year earlier following 31 months of year-on-year growth, according to Ministry of Economic Affairs data released on Monday. The index also fell by 6.31 per cent compared to August, the ministry said.

Declining output signals economic softening in the third and fourth quarters for export-reliant Taiwan due to consumer hesitation in the world’s biggest countries, analysts said, with other Asian exporter economies feeling the same pinch.

Consumers don’t need to update their smartphones or upgrade their laptops any more, so you don’t get the big purchases as before

Song Seng Wun

“Asia is slowing down,” said CIMB Private Banking economist Song Seng Wun, pointing to less overall demand for electronics compared to phases during the coronavirus pandemic when remote working and home study were more common.

“Consumers don’t need to update their smartphones or upgrade their laptops any more, so you don’t get the big purchases as before.”

In South Korea, an exporter of memory chips, phones and vehicles, gains in industrial production had already edged down in July and August, while manufacturing output in Singapore eased to just 0.5 per cent in August.

The war in Ukraine, high inflation and supply-chain disruptions linked to China’s zero-Covid policy are seen to have dampened consumption in much of the world.