The Nikkei Taiwan Manufacturing Purchasing Managers’ Index (PMI) slipped to 49.4 last month, down from 50.6 in January, indicating a renewed deterioration in operating conditions for local manufacturers due to a drop in new business orders and output.
“Operating conditions deteriorated last month after a slight improvement in January amid reports of weaker economic conditions and softer client demand,” said Markit, which compiles the Nikkei PMI survey.
PMI readings aim to gauge the health of the local manufacturing industry. A PMI score above 50 indicates expansion and values below the threshold suggest contraction.
Although the degree of the contraction was minor, it was the first time the PMI has dropped below 50 in three months.
The official PMI compiled by the Chung-Hua Institution for Economic Research (中華經濟研究院) is due to be released on Monday next week.
The latest data suggest the nation’s export-orientated businesses are still facing headwinds stemming from sluggish demand at home and abroad, Markit economist Annabel Fiddes said.
That explains why new orders and output contracted, Fiddes said, as Lunar New Year-related demand faded away and orders for next-generation consumer electronic devices have yet to become evident.
New export contracts declined at their quickest rate since November last year, the survey showed.
PMI is an important economic bellwether, because Taiwan is home to the world’s largest chipmakers, chip designers, laptop and smartphone vendors and components suppliers.
Reduced production slowed employment growth across Taiwan’s manufacturing sector, with the rise in staff numbers being the weakest in four months, the survey indicated.
Weaker demand weighed on selling prices last month even though the rate of the reduction eased to a three-month low, the survey indicated.
ROOM FOR STIMULUS
Companies cited cheaper global prices of raw materials as the main source of deflationary pressure, the survey indicated, adding that the reduced prices were intended to spur client demand.
On a positive note, the absence of inflationary pressures suggests there is still room for monetary policymakers to introduce stimulus measures to prop up the economy if necessary, Fiddes said.
The central bank is widely expected to cut interest rates by another 12.5 basis points at its next board meeting later this month, after the People’s Bank of China on Monday lowered its reserve requirement ratio by 0.5 percentage points.
Taiwan relies heavily on China for economic growth.
PharmaEssentia Corp (藥華醫藥) shares have jumped 80.56 percent since the company obtained a US polycythemia vera (PV) drug license for its new interferon drug Besremi (ropeginterferon alfa-2b-njft) on Nov. 12. Shares on Friday closed at NT$195 in Taipei trading, up from the stock’s closing price of NT$108 on Nov. 12. PV is a rare, chronic and life-threatening blood cancer linked to a stem cell mutation in the bone marrow that results in an overproduction of blood cells and places sufferers at risk of having a blood clot, stroke or heart attack. PharmaEssentia is preparing to make Besremi available in the US in the
The US$410 DeliSofter pot looks much like the rice cookers ubiquitous in Japanese households and it does prepare rice in 24 minutes. However, this invention of two Panasonic Corp engineers is designed to do more and help people with swallowing difficulties. The two women led the creation of a spin-off company, Gifmo Co, to sell the specialized steam cooker, which they say can turn fried chicken soft enough to be sliced with a potato chip. The machine works by first cutting into food with a series of blades and then subjecting it to extremely high pressure at a temperature of 120°C,
Google’s Irish subsidiary has agreed to pay 218 million euros (US$244.94 million) in back taxes to the Irish government, company filings showed on Thursday. The US tech giant, which had been accused of avoiding tax across Europe through loopholes known as the “Double Irish, Dutch Sandwich,” said it had “agreed to the resolution of certain tax matters relating to prior years.” Google Ireland Ltd said it would pay corporation tax of 622 million euros for last year, including the 218 million euros of backdated tax settlement and interest charges. The previous year, Google Ireland paid taxes of 263 million euros. The company, which is
Ginko International Co (金可國際), the nation’s biggest maker of contact lenses, yesterday said that its board of directors approved a takeover bid of NT$27.18 billion (US$976.43 million) by Glamor Vision Ltd and its subsidiary Glamor International Ltd. The Glamor offer was to buy all 97.07 million Ginko shares for NT$280 each, Ginko said in statement submitted to the Taiwan Stock Exchange. That represents a premium of 38.61 percent compared with Ginko’s closing price of NT$202 on Thursday. After the transaction, Ginko would become a private company, with all shares delisted from Taipei Exchange, the statement said. The firm’s global headquarters in Taichung and its