The HSBC manufacturing purchasing managers’ index (PMI) for Taiwan jumped to 54.1 last month, from 52.7 in February, as the global economic outlook took on a more positive tone, boosting the nation’s industrial output and employment, the banking group said in a report yesterday.
All sub-indices climbed higher last month from a month earlier, suggesting the pickup in manufacturing activity might prove sustainable, despite lingering downside risks, HSBC Greater China economist Donna Kwok (郭浩庄) said.
“The latest result indicates Taiwan’s electronics-driven recovery remains on track, with manufacturing activities improving to a 10-month high,” Kwok said in the report.
The PMI is designed to gauge the health of the nation’s manufacturing sector, with a value above 50 indicating expansion and a lower reading suggesting contraction.
For the first quarter, Taiwan’s PMI averaged 51.9, against 44.9 three months earlier, signaling the economy had emerged from a technical recession, albeit by a small margin, Kwok said.
Incoming new business flows saw their fastest pace of expansion in 10 months, with the new orders and new export orders sub-indices jumping to 56.5 and 55.4 last month from 54.2 and 53.8 in February respectively, the report showed.
Global restocking activity and domestic markets underpinned the manufacturing revival, Kwok said.
The output sub-index rose an 11-month high of 56.5, from 53.8 one month earlier, the report found.
Increased production helped raise the sub-index on stocks of finished goods to 53.9 last month from 52.0 one month earlier and the reading for stocks of purchases to 52.7 from 51.8, the report said.
Production activity should stay firm for a while, judging from the value of new orders minus inventories, which hit an 11-month high of 2.6 last month, widening from 2.1 in February, Kwok said.
Employment expanded for the fourth-straight month, but at a slower pace as the sub-index recorded 50.7 last month versus 51.3 in February, the report indicated.
“Over 90 percent of the respondents saw no change in staffing levels,” Kwok said. “Firms with headcount increases cited higher production demands for efforts to refill vacated positions.”
Last month saw input prices accelerating faster than output prices as the former sub-index rose to a seven-month high of 55.4 from 53.1 in February, while the latter reading eased from 51.1 to 50.5, the report said.