The nation’s official purchasing managers’ index (PMI) slowed for a fourth straight month to 52.6 last month from 53.6 in June, a report by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) showed yesterday.
However, the figure last month also marked the fifth straight month it has stayed above the threshold of 50, indicating continued expansion, the institute said.
“In line with various global economic indicators, the latest PMI reading showed continued expansion, albeit at a slower pace,” CIER president Wu Chung-shu (吳中書) told a press conference.
The survey, which covered a total of 262 respondents in the manufacturing sector, showed that manufacturing sentiment over the next six months slid to 51 last month, down 0.7 points from June.
Manufacturing sentiment “fell month-on-month for a second month in a row, as the economic rebound over the past few months was not as strong as expected,” Wu added.
Supply Management Institute in Taiwan (SMIT, 中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said some manufacturers expect the launch of new products by Apple Inc to drive up demand in the fourth quarter, while others maintained a relatively conservative attitude.
The CIER’s PMI data — a leading indicator of the economic outlook for the next three to six months — comprises five sub-indices: new orders, production, employment, inventories and supplier deliveries.
New orders and production were the only two sub-indices to post increases last month from a month earlier, rising 1.2 points and 0.3 points to 52.6 and 55.8 respectively, the report showed.
Meanwhile, the sub-indices of employment and inventories slowed last month to 54.3 and 51.9, dropping 2.3 points and 2.4 points respectively from June, the report said.
The supplier deliveries sub-index fared more badly, shrinking to 48.3 last month from 50.1 June. It was the first time the sub-index has contracted this year, signifying a more advantageous market for buyers, the report said.
Among the six main industries, the sub-index for electrical and mechanical equipment industry fell to 44.6 points last month from 53.9 points in June, making it the only industry to show a contraction in manufacturing, it said.
Meanwhile, the HSBC Taiwan Purchasing Managers’ Index posted 48.6 last month, down from 49.5 in June, signaling a modest deterioration of business conditions in the manufacturing sector, the British banking group said yesterday.
It was the third straight month the index remained in contraction mode as a weaker global trade cycle continued to weigh on Taiwan’s buying activity and stocks of purchases, HSBC said.
“The faster decline in new orders, especially on the external front, has been matched by weaker production… This poses challenges to Taiwan’s growth outlook,” HSBC Greater China economist Donna Kwok (郭浩庄) said in the report.
With new orders and new export orders falling at steeper rates, output at manufacturing plants contracted for the third months in a row last month, the report said.
The pace of contraction accelerated, with more than 25 percent of respondents noting lower production levels, the report said.
Additional reporting by Crystal Hsu