BMI View: Taiwan's freight transport sector will continue to be affected by the slowdown i n the Chinese economy in 2016. Taiwanese exports will feel the headwinds from China as well as the relative strength of the TWD compared to the KRW. Air freight will continue its growth on a more moderate level over the short term, before picking up slightly in 2017/2018, while road and rail will both grow at a faster rate over the medium term.
Taiwan's economy contracted by 1.0% in Q315 compared to the 0.5% expansion registered in the previous quarter. Ongoing weakness in the Chinese economy amid increasing uncertainty in the domestic political situation will continue to weight on Taiwan's economic growth. As such, we have downgraded our 2015 and 2016 real GDP forecasts to 1.0% and 1.9% respectively. GDP growth for 2016 was previously forecast at 2.5%.
Exports will slow down as Taiwan is directly affected by headwinds from the Chinese economic slowdown as well as the relative strength of the TWD compared to the KRW. As China is Taiwan's biggest trade partner accounting for about 40% of its exports, the continued situation in China will have a negative effect on Taiwan's trade growth. Export growth will depend on growth rates in China over the medium term.
Road freight continues to remain the dominant freight mode in Taiwan and in 2016 we expect it to perform modestly with a 0.9% growth rate. Rail freight comes in second in terms of freight share, with a growth rate of 1.6% in 2016 which is a decrease on 2015 estimates. Air freight will continue to have the strongest growth, however we continue to caution that the country's over reliance on tech-related exports leaves Taiwan somewhat vulnerable to changes in the global electronics business cycle.
Taiwan's export orders fell 4.5% y-o-y in September, the sixth consecutive monthly drop in 2015, but performed better than the 12.7% y-o-y decline predicted by a Reuters survey. The better than expected figure was mainly attributed to the launch of Apple's latest iPhones, which increased demand for the island's signature technology goods.
Key BMI Forecasts
We estimate total road freight volumes will have risen by 1.0% y-o-y over 2015 to reach 547.20mn tonnes and forecast growth of 0.9% to reach 552.07mn tonnes in 2016.
We estimate total rail freight volumes will increase by 1.9% y-o-y over 2015 to reach 11.43mn tonnes, and forecast growth of 1.60% to reach 11.61mn tonnes in 2016.
We estimate total air freight volumes will rise by 2.8% y-o-y over 2015 to reach 1.21mn tonnes, and forecast growth of 1.7% to reach 1.23mn tonnes in 2016.
We forecast total trade value to grow by 2.70% y-o-y in 2016.
The Taiwan Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.
BMI Research's Taiwan Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Taiwanese freight transport and logistics industry.
- Benchmark BMI's independent freight transport industry forecasts on Taiwan to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
- Target business opportunities and risks in the Taiwanese freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Taiwan.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the freight transport sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2008-2012) and forecasts to end-2019 for all key industry and economic indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast including:
- Transport Sector: Total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes).
- Trade: Exports and imports (USDmn) by category of goods (manufactured goods, food, chemicals etc.); top five import and export trade partners (USDmn); imports/exports to each global region (USDmn)
- Port Data: Throughput (‘000 tonnes) for all major ports in the state.
- Oil Products Prices: Price forecasts for gasoline and aviation fuel (USD/bbl) at all major global energy trading hubs.
- Economic Indicators: Nominal GDP (USDbn); real GDP growth (%); GDP per capita (USD); industrial production (%); unemployment (%)
Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.
Industry Trends and Developments
Analysis of the latest projects across the freight transport sector (road, rail, air, sea and logistics) including a market overview which provides an outline of the key elements driving development.
The Freight Transport market reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.
Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses.
The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Freight Transport reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.