The value of Taiwan's machinery production has been growing steadily almost every month since the industry bottomed out in February 2002, according to the Industrial Technology Information Service (IT IS) office of the Industrial Technology Department (ITD), Ministry of Economic Affairs (MOEA). The two exceptions were February 2003 and 2004; because of the Chinese New Year holiday, February is traditionally a slow month.

According to a survey conducted by IT IS, the overall production value of the domestic machinery industry was NT$163 billion (US$4.74 billion at NT$34.1:US$1) in the first four months of this year, up 23% over the corresponding period of 2003. The office expects production to have hit NT$244.5 billion (US$7.17 billion) in the first half of the year, an 18% improvement, and predicts that production for the full year will top NT$489 billion (US$14.34 billion), an increase of 8.4% over last year.

The survey results indicate that for most categories of domestically made machinery double-digit growth was chalked up in the first four months of 2004. Exceptions were engines, food and beverage processing machinery, textile and apparel machinery, paper-making machinery, construction machinery, pollution-control equipment, air compressors, pumps, bearings, gears, power-transmission devices, packaging machinery, and drinking-water equipment.

According to statistics compiled by the MOEA's Industrial Development Bureau, molds and dies had the greatest production value in the first four months of this year at NT$17.6 billion (US$516 million), up 17%. Metal-cutting machine tools followed with a value of NT$17.2 billion (US$504 million), a 43% improvement, and plastic and rubber processing machines came in third with NT$11.6 billion



For 2004 as a whole, the production value of metal-cutting machines is expected to expand by 20% (following 26% growth in 2003) to reach NT$51.7 billion (US$1.51 billion), while the production of plastic and rubber processing machines is anticipated to achieve a growth rate of 17% to NT$34.7 billion (US$1.01 billion).

IT IS reports that Taiwan exported NT$91.5 billion (US$2.68 billion) worth of machinery in the January-April period this year, an increase of 11.3% over the same months of 2003. Growth was fastest for machine tools (up 25% to NT$21 billion, or US$616 million), followed by plastic and rubber processing machines (up 16.1% to NT$8.5 billion or US$249.26 million), woodworking machines (an increase of 14.7% to NT$7.2 billion (US$211 million), and textile and apparel machines (which grew 1.4% to N$T11.5 billion (US$337 million).

More Robust Import Growth

On the import side, customs statistics show that Taiwan brought in US$5.318 billion worth of machinery in the first four months of this year, growth of 47% over the corresponding period of 2003.

Among all imports, special-purpose machinery ranked first in value at US$1.75 billion in the first four months, accounting for 32.9% of all imports. Inward shipments of semiconductor and computer, consumer-electronics, and communications (3C) machinery grew 41%.

Second place in import value went to machine tools, with US$613 million in shipments in the first four months, up 202% from the previous year and accounting for 11.5% of all machinery imports. Pumps, fans, and compressors followed with US$278 million, up 20% and accounting for 5.4% of the total; plastic and rubber processing machines with US$233 million, up 99% and accounting for 4.4%; engines and parts at US$250 million, up 31% and accounting for 3.9%; valves at US$145 million, up 32% and accounting for 2.7%; and textile machines at US$93 million, down 9% to account for just 1.8% of overall machinery imports.

Japan was the biggest source of these imports, supplying US$2.88 billion worth in the first four months of 2004, up 42% from the same period of 2003 and accounting for 52.2% of the total. The United States ranked second with US$1.16 billion, up 111% and making up 21.8% of the overall figure; Germany came in third with US$332 million, up 22% to account for 6.3%; and mainland China was in fourth place with US$229 million, up 51% and accounting for 4.3%. Other major sources during the four-month period were South Korea, Switzerland, Britain, Italy, and France.

The Taiwan Association of Machinery Industry (TAMI) reports that most of the advanced machinery imported from the industrially advanced countries was for use in the optoelectronics, communications, information-technology, and semiconductor sectors.

The association predicts that in light of the rosy predictions about the global economy being made by the World Bank, Taiwan's machinery industry will record substantial growth in both production and export value this year. The bank predicts that the global economy will grow by 3.2% and that worldwide trade will expand by 8.1% this year. Based on these predictions, TAMI vice president Wang Cheng-ching believes that the island's overall growth for the year will reach 5%, and that this robust expansion will help stimulate continued growth in the machinery industry.