Sat, Aug 31, 2013 - Page 13 News List

Flat PMI shows weak economy

SOFT EXPANSION:New orders and production both posted increases this month, while inventories contracted for the first time since February, a CIER report showed

By Amy Su  /  Staff reporter

The official purchasing managers’ index (PMI) stood at 52.6 this month, which was unchanged from last month, providing more evidence of a soft economic expansion, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said in a report yesterday.

The figure marked the sixth consecutive month it has stayed above the threshold of 50, the institute said. A reading above 50 indicates expansion, while a figure below 50 shows a contraction.

The 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.

“The global economy is continuing its pace of slow recovery,” CIER president Wu Chung-shu (吳中書) told a press conference.

The new orders and production sub-indices both posted increases this month from a month earlier, rising by 2.5 points and 0.6 points to 52.6 and 56.4 respectively, the report showed.

Supplier deliveries also climbed by 1.3 points to 49.6 this month from last month, but the figure remained below the threshold of 50 for the second month in a row — signifying a market that is more advantageous to buyers, it said.

The employment sub-index slowed to 52.6 this month, down 1.7 points from July, but continuing its trend of expansion for the ninth consecutive month.

However, the inventories sub-index contracted for the first time since February, dropping by 2.4 points from July to 49.5 this month.

Meanwhile, a survey of manufacturing sentiment over the next six months rose to 53.3 this month, up 2.3 points from last month and marking the ninth straight month of expansion, as more respondents expressed confidence over the near-term outlook.

However, among the nation’s six main industries, the sub-indices for the electronics and optical sector and the transportation industry both contracted this month, ending five straight months of expansion, the report said.

Wu said taht some respondents in the electronics and optical sector expressed concerns over a slower-than-expected momentum in new orders during the usual high season, increasing uncertainties over the outlook in the near future.

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