Manufacturing activity expanded last month for the 11th straight month, with the official purchasing managers’ index (PMI) rising to its highest level since May last year, according to a report released by the Chung-Hua Institution for Economic Research (CIER) yesterday.
The PMI reading stood at 53.6 last month, up 0.5 points from a month earlier, the Taipei-based think tank said.
A PMI of 50 and above represents expansion and less than 50 signifies a contraction.
The index — 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.
“The PMI continues its upward trend, reflecting that Taiwan’s economy is growing at a moderate pace,” CIER president Wu Chung-shu (吳中書) told a press conference.
Supply Management Institute in Taiwan (SMIT, 中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) made similar comments, saying local manufacturers have received more orders than their shipments, based on CIER’s survey.
As local manufacturers were more positive about future demand, they were willing to build inventories, which drove PMI upward and maintained expansion last month, the CIER said.
The inventories sub-index climbed 6.1 points to 53.6 last month from a month earlier, marking the largest increase among the five sub-indices and ending five months of contraction, the report said.
Meanwhile, supplier deliveries rose by 0.8 points from the previous month to 52.9, maintaining expansion for the fifth-straight month, according to the report’s data.
The remaining three sub-indices declined last month from a month earlier, but they all remained in the expansion territory.
New orders dropped by 1.7 points to 55.3 points last month from a month earlier, while production fell 1.3 points to 56.7 last month from the previous month, CIER’s statistics showed.
Employment remained above 50 for the 14th consecutive month, but the sub-index decreased by 1.9 points month-on-month to 51.7 last month, CIER’s report said.