Taiwan's Industrial Output Rises More Than Estimated as Joblessness Falls
Taiwan’s industrial production rose more than estimated, gaining for a 12th straight month, while the jobless rate fell to a 20-month low, increasing the central bank’s scope to boost borrowing costs.
Output advanced 23.4 percent in August from a year earlier, after rising a revised 20.93 percent in July, the Ministry of Economic Affairs said in Taipei today. The median of 11 estimates in a Bloomberg News survey was for a 21.6 percent increase.
Taiwan’s 13.1 percent first-half economic growth spurred factory output and employment as well as home prices, raising the risk of a property bubble. The central bank may increase its benchmark interest rate next week to tackle the threat, even as slower U.S. growth and European austerity cloud the outlook for the exports fueling the island’s expansion.
“Today’s numbers would justify another rate hike by the central bank as it shows they’ve further room to roll back monetary stimulus,” said Tony Phoo, an economist at Standard Chartered Plc in Taipei. Phoo expects policy makers to raise the benchmark rate by 0.125 percentage point at their quarterly meeting on Sept. 30.
The central bank increased the benchmark by 0.125 percentage point from a record-low 1.25 percent in June. It also capped loans for second homes in the Taipei metropolitan area to curb real estate speculation.
A separate report today showed Taiwan’s jobless rate declined to 5.11 percent in August from 5.17 percent in July. The median estimate of seven economists in a Bloomberg News survey was for unemployment of 5.13 percent.
The Taiwan dollar climbed 0.5 percent to NT$31.6 against its U.S. counterpart by the 4 p.m. close in Taipei, while the benchmark Taiex share index finished little changed at 8,202.54.
The island’s currency has pared gains or weakened at the end of most trading days in the past five months due to intervention by the central bank, according to traders.
A weaker local dollar boosts industrial output by aiding export competitiveness at companies including Hsinchu-based Taiwan Semiconductor Manufacturing Co., the world’s largest custom manufacturer of chips, and Miaoli-based Chimei Innolux Corp., Taiwan’s biggest maker of liquid-crystal displays.
Production at manufacturers rose 24.69 percent from a year earlier in August, after climbing a revised 22.44 percent in July, today’s figures showed. Output in the mining and quarrying industries advanced 16.35 percent, and declined 6.08 percent in the construction sector.
Export orders, an indication of shipments in the next one to three months, jumped 18.2 percent from a year earlier to $34.88 billion in August, data this week showed. The strength of the yen has been helping the island’s exporters, Huang Ji-Shih, head of the economic ministry’s statistics division, told reporters on Sept. 20.
The number of unemployed people declined to 576,000 in August from 578,000 in July. Without adjusting for seasonal factors, the jobless rate fell to 5.17 percent from 5.2 percent.
The government aims to cut the unemployment rate to 5 percent by the end of 2010, Premier Wu Den-yih said earlier this month. State-monopoly Taiwan Water Corp. has announced plans to take on 200 temporary workers, while Chimei intends to hire 3,500 workers by the end of the year.
The $355.5 billion economy expanded by 12.53 percent in the three months through June. Growth will slow to 6.9 percent in the third quarter from a year earlier and 1.37 percent in the fourth, according to a forecast by the nation’s statistics bureau.
To contact the editor responsible for this story: Chris Anstey in Tokyo at firstname.lastname@example.org