Taiwan, Singapore See Improved Growth at End of 2013, Qualified Positives for 2014

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The opinions coming out of the World Economic Forum in Davos include predictably mixed messages. The bankers are relatively sanguine about recovery prospects in 2014, whereas a section of the hands-on industrial executives say that they are worried about too much optimism, and the IMF warns of deflationary pressure. Who would you trust?

Taiwan and Singapore, two bellwether economies in Southeast Asia, appear to have done slightly better than expected in December 2013.

With a fourth-quarter growth of 2.92% from the same period in 2012, Taiwan's economy performed better than expected, with preliminary government data showing exports rebounding on improving demand for consumer electronics and a surge in domestic consumption.

Taiwan's total growth in 2013 stood at 2.19%, up from 1.48% in 2012, which is the slowest pace in three years. Declining exports to most overseas markets were offset by increased demand from China and Southeast Asia.

Domestic demand in the fourth quarter increased 4.07% in Taiwan, boosted by higher consumer spending and corporate investment, led by semiconductor makers.

Taiwan has been hit by the European debt crisis and the Chinese slowdown. The government expected many of the negative factors to persist, and its last 2014 growth forecast was down from the previous 3.37% forecast.

The electronics sector also drove Singapore's growth in December, where figures from the Singapore Economic Development Board show industrial production growing 6.2% from the same quarter last year, running counter to economists' earlier estimate of a 1.4% drop.

"This would lead to a revision in the advanced estimate of GDP [gross domestic product]. We could possibly see Singapore escape an outright contraction last quarter, and the full-year growth might come closer to 4% for 2013," Barclays economist Joey Chew told Channel NewsAsia. Earlier government estimates had growth coming in at 3.7% for 2013.

Excluding biomedical engineering, output increased 12.1%. The electronic cluster's December output grew 22.2% from fourth-quarter 2012, more than doubling November's growth of 11%, and was led by gains in data storage and semiconductors.

Output of transport engineering increased 13.8% from the same period last year, led by 19.8% growth from the marine and offshore engineering sector. Chemicals output increased 6.4%. The biomedical cluster fell 14.9% in December, with pharmaceuticals creating the drag.

"The more domestically driven sectors will face greater headwinds arising from the tight labor market and continued restructuring, whereas externally driven ones will face more tailwinds in terms of having better demand, growing faster than [the] domestically-driven one in 2014,"Jeff Ng, Standard Charter bank economist, told Channel NewsAsia.

So it looks like mixed messages for 2014, with a possible qualified upside.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.