Taiwan’s industrial production likely jumped in August on favorable base effect, rebounding external demand

Industrial production in Taiwan is likely to have witnessed a one-month jump in August. Export orders in the country recovered robustly by 8.3 percent year-on-year in August. This was the first positive figure seen in 16 months. It is evident that the Taiwanese economy is advancing from Apple’s supply-chain production for the new iPhone, as export orders in electronic products and information and communication products together added 7.5 percentage points to the headline.

According to a Societe Generale research note, Taiwan’s industrial production is expected to have increased sharply as well to 4.9 percent year-on-year in August from July’s -0.3 percent year-on-year in July. A solid, favorable base effect and improving external demand are likely to have mainly driven the improvement in industrial production.

Therefore, the headline year-on-year growth pace is expected to decline immediately in the following month and the industrial production is still likely to grow at a modest pace, which is a tad below 2 percent year-on-year for the remainder of 2016, added Societe Generale.