Taiwan’s industrial output fell into contraction again in July, marking a second negative indicator out the gate in the days following a recent decision to raise the annual GDP forecast for 2016.

Headline industrial production fell 0.31 per cent year-on-year in July, according to Taiwan’s Ministry of Economic Affairs, falling back from growth of 0.88 per cent in June and running counter to economists’ median forecast of 1.7 per cent.

While most major categories saw output accelerate from a month prior – resulting in a month-on-month gain of 1.11 per cent – key sectors saw annualised growth slow or slip into contraction.

Construction volume fell 29.8 per cent year-on-year, while consumer goods output dropped 7.28 per cent for the period.

Growth of 1.48 per cent in heavy industry was exceeded by contraction of 4.21 per cent in light industry, while mining and quarrying output fell almost 5 per cent. Utilities also saw a marked year-on-year drop of 6.67 per cent.

The industry readings follow export figures for July showing the first growth in 18 months, though figures out this week showed contraction in export orders had sharpened again last month.

That makes today’s headline figure the second negative indicator released since Taiwan’s Directorate General of Budget Accounting and Statistics raised its forecast for annual GDP – if only by 0.01 percentage points – to 0.7 per cent.

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