Tue, Dec 31, 2013 - Page 13 News List

Manufacturing recovery continues to slow: TIER

Staff writer, with CNA

The composite index of the manufacturing sector continued to flash a “yellow-blue” indicator for last month, signaling a slowdown of an already sluggish economic recovery, a local think tank said yesterday.

It was the eighth consecutive month that the manufacturing sector showed signs of a slowdown, according to the composite index compiled by the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院).

TIER’s index for last month rose by 0.8 points from the previous month to 11.99, on the back of a slightly improved industrial production index, export orders, as well as exports and imports figures. A “yellow-blue” signal indicates the index is between 10.5 points and 13 points.

Before its eight consecutive “yellow-blue” levels, the index flashed “blue” in February and March, signaling sluggishness, and “green” in January, indicating stability.

The other two colors on TIER’s five-level color scale are “yellow-red,” meaning mild overheating, and “red,” indicating overheating.

The composite index measures five aspects of the manufacturing industry: demand, costs, pricing power, business environment and investment in raw materials.

The investement in raw materials, pricing power and business environment sub-indices were up 0.86 points, 0.15 points and 0.08 points respectively from October, while the demand and costs sub-indices fell 0.18 points and 0.11 points respectively.

In individual industrial segments, textile and ready-to-wear garment businesses benefited from the peak season effects, flashing “yellow-red” and “green” respectively.

The food sector continued to flash “yellow-blue” last month, which TIER attributed to food safety concerns as worries over adulterated edible oil hampered demand.

The sub-index for the petrochemical and rubber segment continued to flash “blue” on falling international crude oil prices resulting from weakening demand, while the electronics/electric sub-index continued flashing “yellow-blue” through the month.

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