Tue, Dec 03, 2013 - Page 13 News List

Manufacturing picks up strength: CIER

CONTRASTS:The acceleration was led by expansions in the mechanical and auto industries, while the electronics and optical industries remained weak, CIER said

By Amy Su  /  Staff reporter

Manufacturing activity improved last month, with the official purchasing managers’ index (PMI) rising at a faster pace for the first time in eight months.

The official PMI reading stood at 52.6 last month, up 0.4 points from a month earlier and remaining above 50 for the ninth straight month, the latest report by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) showed yesterday.

A PMI of more than 50 represents expansion, 50 indicates no change and below 50 signifies a contraction.

The acceleration in the PMI gauge last month also terminated a slowing trend that had gone on in the previous seven consecutive months, the Taipei-based think tank’s report said.

“We have seen the overall economy [in Taiwan] show a gradual recovery, with the mechanical industry rebounding from a month earlier, and the auto industry topping the list,” CIER president Wu Chung-shu (吳中書) told a press conference.

Manufacturing activity in the mechanical industry stagnated in the first half of the year, affected by the depreciation of the yen. However, as the Japanese currency’s fall slowed, orders have flowed back to Taiwanese manufacturers, Wu said.

In contrast, the electronics and optical industries contracted for a second month in a row, reflecting concern that Taiwanese innovation was not strong enough to deal with the intense competition in the field, the institute said.

The PMI — a leading indicator of the economic outlook over the next three to six months — comprises five sub-indices: new orders, production, employment, inventories and supplier deliveries.

New orders rose from 50.7 points in October to 52.7 points last month, expanding for a 13th straight month and a critical component to the PMI’s faster rise last month, the report said.

Production also rebounded by 0.9 points to 53.6 last month from October, while employment increased by 1.2 points to 53.7 last month, expanding for a 12th straight month, it said.

However, supplier deliveries and inventories remained slowed last month.

Although it remained above 50 for a third consecutive month, supplier deliveries dropped by 1.1 points from the previous month to 50.8 last month, data showed.

Meanwhile, inventories contracted for a fourth straight month last month, falling by 0.4 points to 49.3, the report said.

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