Fri, Apr 01, 2016 - Page 14 News List

Manufacturing index now ‘yellow-blue,’ TIER says

OUT OF THE BLUE:The ‘sluggish’ indicator ended 10 months of ‘blue’ indicators for recession. All components advanced slightly, with the exception of production costs

By Crystal Hsu  /  Staff reporter

The composite index for the local manufacturing industry flashed a “yellow-blue” signal in February, terminating 10 months of “blue,” reflecting a continued weakness in domestic operating conditions, but that the pace of the downturn had eased somewhat, the Taiwan Institute of Economic Research (TIER, 台經院) said in a report yesterday.

The TIER monitor for the industry gained 1.98 points to 11.02 in February, tipping the monitor signal to “yellow-blue,” meaning a continued sluggish state.

The institute adopts a five-color system to gauge manufacturing activity, with “red” indicating overheating, “yellow-red” showing fast growth, “green” suggesting stability, “yellow-blue” indicating a sluggish state and “blue” indicating recession.

“The operating conditions pointed to further weakness [in February], given that export orders and industrial production stayed in negative territory though the pace of decline narrowed,” the think tank said in a monthly report.

The index seeks to measure the health of the manufacturing industry by looking at five perspectives: demand, selling prices, production costs, raw material costs and operating environment.

All components made slight advancement except for production costs, the report found.

Textile firms saw demand dwindling in February as the Lunar New Year holiday shortened working days.

However, demand for functional and environmentally friendly textile products hovered around healthy levels, thanks to cold weather, the report said.

Petrochemical and rubber industries also had a soft performance as oil prices rose in February from January, but remained low compared with a year earlier, the report said.

As a result, chemical exports continued to decline, but eased to single-percentage digits, the report said.

The steel industry panned out the weakest among all makers, the report found, though steel product quotes showed a rebound after China took drastic steps to address a supply glut.

Concerns over supply surplus lingered and the Lunar New Year holiday rendered the oversupply more evident, the report said.

As for the electronic sectors, the main driver of Taiwanese exports, inventory adjustments are about to come to an end, especially for semiconductor makers, the report said, citing a modest improvement in demand.

Restocking demand might soon boost shipments of electronic components, the report said.

The auto and auto parts industries suffered a steep decline in February as consumers bought new cars ahead of the Lunar New Year, the report said.

However, the outlook for the industry remains healthy with a “green” light as aggressive promotion campaigns by automakers might boost sales for cars and auto parts, the report said.

This story has been viewed 1624 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top