A leading industrial research institution in Taiwan has raised its forecast of manufacturing output growth for the island due to a growing global economy.
The output value of Taiwan's manufacturing sector for 2017 is expected to grow 3.87 percent from a year earlier, up 0.67 percentage points from the research group's earlier estimate, according to Taiwan's Industrial Economics and Knowledge Center (IEK).
Jim Chung, deputy director of the IEK, said the economic fundamentals of the Chinese mainland, United States, Eurozone, and ASEAN, the major buyers of Taiwan's products, are better than expected, adding that Taiwan's export-oriented manufacturing sector will benefit from this positive trend.
"The manufacturing sector in Taiwan is expected to climb out of the doldrums seen in 2016 and switch to a growth mode this year. We take a positive and prudent attitude toward it since uncertainties remain," Chung said.
His stance was echoed by Cheng Chih-chiang, co-author of the IEK forecast report.
Cheng said rising trade protectionism, possible fluctuations in raw material prices and exchange rates may cause immediate uncertainties to the island's export-oriented manufacturing sector. Meanwhile, long-existing problems in local industries especially backwardness in technology will hamper it from thriving.
The IEK report showed the proportion of the technology trade deficit of Taiwan's manufacturing sector in its output value has risen from 2007's 0.3 percent to 0.7 percent in 2015.
"More efforts should be made to improve our capacity for technological innovation, thus helping boost the profits from manufacturing," Cheng said.
The IEK also said as the semiconductor and electronics industries on the island enter peak season in the second half of the year, they will inject certain momentum into the manufacturing sector. It estimated that there is only an 18.4 percent possibility that the sector's growth might slow down.