Steady economic sentiment and stronger seasonal demand ahead of the Lunar New Year led the nation’s official purchasing managers’ index (PMI) to report faster-than-expected expansion last month, a report by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The composite PMI jumped to 57.7 last month from 51.3 in December last year, rising above the 50-point threshold for the second month in a row, the Taipei-based think tank said in its monthly report.
A PMI reading above 50 indicates expansion, while a reading below 50 signifies a contraction.
“Following the US’ ‘fiscal cliff’ issue easing, as well as Japan’s moves [to stimulate its economy], Taiwan’s PMI may show a rising trend ahead,” CIER president Wu Chung-shu (吳中書) told a press conference.
However, the faster-than-expected acceleration of the PMI last month mainly reflected stronger seasonal demand from customers prior to the Lunar New Year holiday, Wu added.
The CIER’s PMI — a leading indicator of the nation’s economic outlook over the next three to six months — consists of five sub-indices: new orders, production, employment, inventories and supplier deliveries.
The five sub-indices all showed an upward trend and rose above the 50-point threshold.
The new orders sub-index and production sub-index surged to 66.6 points and 62.6 points respectively last month from 54.8 in December last year, the third consecutive month that both stayed above the 50-point threshold.
Meanwhile, the employment sub-index climbed to 54.8 last month, up 1.5 points from a month earlier, marking its highest level since June last year, the report said.
The supplier deliveries sub-index stood at 51.5 points last month, terminating a run of contractions over the past six months, while the inventories sub-index rose by 5.2 points from the previous month to 53 points, the report said.
The composite PMI reading for Taiwan’s six major industries — the chemical, bio-technology and medical sector, the basic raw material sector, the transportation sector, the electrical and mechanical sector, the food and textiles industry, and the electronic and optical industry — all stood above 50 points last month for the first time since June last year, statistics showed.