Machinery Exports Boosted by Increased Sourcing from Europe and Asia

Industry Commerce Times, July 29, 2008
By Zhuang Fu-an (Taichung)

Helped by markedly increased sourcing from Germany, Italy, Vietnam, Indonesia and Malaysia, and well timed price rises by manufacturers, the total export value of Taiwan's machinery products for the first five months of 2008 reached USD7 billion, a growth of 10.9% year on year, according to figures released by the Taiwan Association of Machinery Industry (TAMI) yesterday.  

Although industry and business in general are struggling under the pressure of global inflation, the export of Taiwan's machinery products has continued to flourish, with large numbers of international orders received by manufacturers on the twin competitive edge of low price and fine quality. In terms of product category, machine tools saw the highest export value of USD1.57 billion, a growth of 19.9%, followed by specialized machinery at USD556 million, a growth of 17.6%, and machinery for processing plastics and rubber at USD440 million, a growth of 10.7%. Further analysis by TAMI showed that due to the ripple effect of the sub-prime crisis, Mainland China, U.S., and Japan, Taiwan's top three markets for machinery exports, weakened sharply in 2008, with negative export growth rates ranging from 3.5% to 5.9%. On the other hand, there has been intensified sourcing from many Asian and European countries. For example, Vietnam, Taiwan's fourth largest export market for machinery products, increased its imports from Taiwan by 59%, with Germany, Indonesia, Italy and France also making similar increases, by 26%, 38%, 29% and 43%, respectively, resulting in the double-digit growth of Taiwanese machinery exports in the first five months of 2008.

TAMI maintains that, domestic machine tools and industrial machinery manufacturers have had to raise prices in response to significant increases in the costs of upstream materials like castings and steel plates, boosting the export value in the first five months of 2008; moreover, global inflation expectations led to the advanced buying of machinery and equipment by some users, helping the sector’s performance. The immediate outlook remains positive, as the persistent strength of the Euro means that Germany, Britain, Italy and France will continue to increase machinery and equipment sourcing in Taiwan. With the positive performance of exports to emerging markets like India, Russia, Brazil and Vietnam, the total export of Taiwanese machinery products is expected to achieve medium growth of 10% in value for 2008.