The nation’s machine tool exports last month declined 3 percent to US$310 million from US$320 million the previous month, as global demand remained unstable, the latest industrial data showed.

The monthly decline in exports last month came after shipments of machine tools had grown for two consecutive months in April and May, the Taiwan Machine Tool & Accessory Builders’ Association said.

The Greater Taichung-based association said that total machine tool exports from domestic manufacturers during the first six months of the year totaled US$1.73 billion, down 17.4 percent from the previous year, because of a weak recovery in Europe and the economic slowdown in China.

"The volatility of monthly demand for machine tools is larger compared with a year ago due to the weak economy,” Carl Huang, secretary-general of the association, said by telephone yesterday.

Huang said he believes it will be difficult for exports this year to reach the US$4.24 billion recorded last year. A month ago, he said the sector’s total output for the year would match last year’s level and that total exports would grow.

The association also expects that Japanese machine tool companies will cut their prices this quarter, which Huang said could mean tougher competition for Taiwanese companies, making it more likely that they will cut prices and drive down the total value of exports.

However, manufacturers of machine tools with a higher degree of automation face less competition because the demand for such tools is still strong in both China and the US, he said.

"Companies in China and the US are facing the problem that there are fewer qualified mechanics in these countries. As a result, they are automating,” Huang said.