The official manufacturing purchasing managers’ index (PMI) stood at 58.8 last month, comfortably above the neutral mark for the 18th consecutive month as local firms benefited from inventory demand for next-generation smartphones, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The improvement extended to the non-manufacturing index (NMI), which stood at 55.2, and the growth momentum for both sectors is likely to intensify this quarter due to the high sales season.
“The latest PMI and NMI data reflect general expansions in operating conditions for most Taiwanese firms, thanks to a stable economic recovery at home and abroad,” CIER president Wu Chung-shu (吳中書) told reporters.
The PMI and NMI readings aim to gauge the health of the manufacturing and non-manufacturing sectors, with scores higher than 50 indicating expansion and values lower than the threshold suggesting contraction.
Upcoming launches of products by global brands including Apple Inc have shored up the businesses of local technology firms as evidenced by a robust new order sub-index value of 63.2, the survey said.
The sub-index on industrial output stood at 60.9, while the employment sub-index rose to 57.6, indicating positive and strong improvement, the survey said.
Robust demand pushed up input prices, sending the raw material prices sub-index higher for the 18th straight month to 73, an increase of 9.8 percentage points from a month earlier, it said.
Firms across the manufacturing sector are upbeat about their business prospects as the six-month outlook sub-index stood at 63.8, slightly lower than the 63.9 posted a month earlier, the survey said.
Firms in the non-manufacturing sector were less optimistic, with the six-month business outlook sub-index slipping marginally below the neutral threshold at 49.8.
Domestic financial institutions in particular have become conservative about their businesses going forward, striking a stark contrast with earlier confidence, Wu said.
Local hospitality providers and construction firms shares that pessimism, he added.
The private Nikkei Taiwan manufacturing purchasing managers’ index reached a similar conclusion with a value of 54.3 for last month.
The Nikkei report showed that the manufacturing sector saw further growth momentum last month, with the latest data showing strong increases in output, new orders and employment, said Annabel Fiddes, chief economist at IHS Markit, which produced the private index.
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