Manufacturing activity expanded for the 16th straight month last month, with local manufacturers maintaining a bullish outlook for the next six months, a report released yesterday by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The official purchasing managers index (PMI) reading stood at 58.2 last month, the Taipei-based think tank said in its monthly report. While the figure edged down 0.4 points from a month earlier, a reading above 50 still represents an expansion.
The index — a leading indicator of the economic outlook over the next three to six months — comprises five major sub-indices: new orders, production, employment, inventories and supplier deliveries.
CIER president Wu Chung-shu (吳中書) attributed the month-on-month slide to slower growth in new orders and employment.
New orders dropped 2.7 points to 59.6 last month from a month earlier, while employment dipped 1.6 points to 56.8, the report said.
However, the sub-index on employers’ outlook over the next six months — a reference indicator not included in the PMI’s five major sub-indices — rose to 68.4 last month, its highest level since the institute launched the index in 2012, reflecting local firms’ optimistic view for the second half of the year.
“Surveyed companies evaluate sentiment over the next six months based on order visibility, which drove the sub-index to above 60 for the sixth straight month,” Chen Shin-hui (陳馨蕙), an assistant research fellow at the institute, told a press conference.
In addition, more than 60 percent of the polled companies expect business prospects to improve in the second half of the year, with some seeing the recovery extending into next year, the institute said.
However, most companies are still not willing to raise inventory levels, indicating cautious optimism, the institute added.
As for economic issues, energy and raw material prices, currency exchange rates and Chinese economic growth were the top three concerns for local companies.
More than 30 percent of polled purchasing managers said they were closely monitoring developments on a proposed service trade agreement with China, but only 10.1 percent were concerned about whether the controversy over the Fourth Nuclear Power Plant would be revolved in the future, the CIER report said.
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