Taiwan’s manufacturing industry remained healthy last month, albeit expanding at its weakest pace in seven months, as external demand continued to recover, especially in the US, HSBC Holdings PLC said in a report yesterday.
The HSBC Purchasing Managers’ Index (PMI) stood at 52.3 last month, down from 52.7 in March, representing the eighth consecutive month of expansion as customers at home and abroad placed more orders, the report said.
“The acceleration in new orders and external demand could mean a faster rebound in economic growth from this quarter onward,” the British banking group’s economist on Asia John Zhu (朱日平) said in the report.
The PMI reading aims to gauge the health of the manufacturing sector, with a score above 50 indicating expansion and a value below the threshold suggesting contraction.
Total new orders and new export orders gained momentum last month, leading to a sharp rise in purchasing activity, the report said.
As a result, production levels at manufacturers continued to strengthen, the report said, adding that the output growth, while solid, is the slowest in six months.
Production activity could pick up in coming months on the back of stronger client demand in developed markets, the report said.
However, Taiwanese manufacturers raised employee levels only marginally last month, deepening pressure on their capacity and unfinished business, the report said.
Despite stronger demand, supplier performance improved for the first time in 10 months, with analysts indicating sufficient inventories helped speed up delivery time, the report said.
Average input costs rose modestly last month, while output prices declined for the third month running due to a combination of price negotiations and lower raw material costs, the report said.