The HSBC Taiwan purchasing managers’ index (PMI) declined for the fifth consecutive month to 43.7 last month from 44.5 in September, as the faltering global economy dampened the nation’s business flows, a report said yesterday.
“The impact of softening external demand became more evident last month” as the US and Europe continued to deleverage, prompting local and foreign buyers to exercise caution, HSBC Asia economist Donna Kwok (郭浩庄) said in the report.
The index, used to gauge the health of the manufacturing industry, is important given Taiwan’s heavy dependence on exports.
A PMI value above 50 indicates expansion, while a smaller reading suggests a contraction.
Last month’s score suggested the country would see an extended soft patch in industrial output and exports.
The new orders sub-index weakened from 41 in September to 39.5 last month, the lowest level since January 2009, as business activity at home and abroad slowed further, the report said.
Meanwhile, the new export orders reading shrank to 39.9 last month from 41.1 in September, helping drive the output measure down to 39.2, also a new low since January 2009, the report said.
Although cautious about the economic outlook, Kwok said the nation should fare better than during the global financial crisis of 2008 as China’s manufacturing activity shows signs of stabilizing.
Taiwan’s job market has remained healthy so far, with the employment sub-index staying in the neutral zone with a reading of 50 last month from 51.1 in September, the report said.
The employment reading further suggests that the nation is not heading toward a recession as in 2009, when the jobless rate climbed for 14 months, Kwok said, adding that the headcount reduction began a quarter ahead of the economic downturn.
Both the input and output price indices retreated further, reading 48.4 and 47.5 respectively, as a result of easing inflationary pressure, the report said.
With the domestic economy slowing, but resilient, the central bank is likely to keep the benchmark discount rate steady at 1.875 percent, Kwok said.
“Taiwan’s ability to fend off the impact of softening Western demand should strengthen, lessening the need for a policy rate cut,” she said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
INFLATION CONSIDERATION: The BOJ governor said that it would ‘keep making appropriate decisions’ and would adjust depending on the economy and prices The Bank of Japan (BOJ) yesterday raised its benchmark interest rate to the highest in 30 years and said more increases are in the pipeline if conditions allow, in a sign of growing conviction that it can attain the stable inflation target it has pursued for more than a decade. Bank of Japan Governor Kazuo Ueda’s policy board increased the rate by 0.2 percentage points to 0.75 percent, in a unanimous decision, the bank said in a statement. The central bank cited the rising likelihood of its economic outlook being realized. The rate change was expected by all 50 economists surveyed by Bloomberg. The
RSS