Modest B ut Positive Port Growth
BMI believes activity levels at Taiwan's main ports will grow at a modest but positive 1.5-4.0% this year. Box traffic at Taiwan's key ports will remain the most dynamic, but will not exceed 4% growth. Broadly speaking, Kaohsiung, Taiwan's largest port, remains the most resilient, not least because it is attracting new investment. Although political risk factors are beginning to rise, the policy of cross-Strait integration is expected to continue.
We are holding to our 3.5% GDP growth forecast for Taiwan in 2015. Although the global outlook has weakened, the domestic economy looks positive, with credit growth on an uptrend and investment in infrastructure remaining positive. Export growth continued strongly in Q414, although lower than in the preceding quarter. Private consumption cooled, possibly reflecting a series of scandals regarding contaminated food. Political risk factors may have also caused something of a pause, given a landslide opposition victory in the November local elections. Notwithstanding this, we see domestic demand remaining strong this year, supported by infrastructure development and construction (including preparations for the 2017 Universiade summer games). Rising real wages and falling oil import prices will also contribute to growth. However, we see exports exposed to headwinds from mainland China's slowing GDP growth and from Taiwan's overdependence on technology-related shipments, which exposes it to downturns in the global electronics business cycle. Our medium-term outlook is for growth to average 3.9% a year in the five years to 2019.
Headline Industry Data
Port of Kaohsiung tonnage throughput in 2015 forecast to increase by 1.5% to 118.231mn tonnes, after forecast growth of 1.3% in 2014. Over the medium term to 2019, we project an annual average increase of 1.6%.
Kaohsiung's container throughput forecast to grow 3.8% to 10.697mn twenty-foot equivalent units (TEUs) in 2015, up from 3.7% growth...