Manufacturing activity in Taiwan last month improved significantly thanks largely to an upturn in new orders and industrial production, the Chung-Hua Institution for Economic Research (CIER) said yesterday.
Last month’s spike in new orders and production resulted from a higher number of working days compared with February, when a six-day Lunar New Year holiday was observed, CIER said, adding that the increased productivity helped local manufacturing recover from the previous month, when the purchasing managers’ index (PMI) fell 8.6 from January.
CIER, one of the Taiwan’s major think tanks, said the manufacturing PMI for last month rose 13.2 points from February to reach 63.6, the second-highest level since it was first released in July 2012.
The highest PMI level — 65.2 — was recorded in March last year, CIER said.
CIER president Wu Chung-shu (吳中書) told a news conference that manufacturing activity in Taiwan returned to normal last month, as the number of working days increased from 15 to 23.
The service sector last month also benefited from the disappearance of seasonal effects, as the non-manufacturing index (NMI) rose 3.7 from February to 54.4, the institute said.
PMI and NMI readings above 50 indicate expansion, while those below 50 represent contraction.
The simultaneous improvements in PMI and NMI readings showed that the local economy remains on the path to stable expansion, Wu said.
In February, the Directorate General of Budget, Accounting and Statistics raised its forecast for the nation’s GDP this year from 2.29 percent growth to 2.42 percent, citing an expected pickup in private consumption and investment.
All major factors in CIER’s PMI for last month moved higher, with the new orders sub-index rising from 24.7 in February to 68.2 last month and the production sub-index rising from 31.2 to 68.2, the institute said.
The employment sub-index increased 5.4 points from February to 56.8 last month, while supplier deliveries increased 0.2 points to 62.7 and inventories increased 4.3 points to 61.2, CIER said.
The sub-indices for the six major industries in the local manufacturing sector — chemicals and biotech, electronics and optoelectronics, transportation, electricity and machinery, food and textiles and infrastructure and raw material industries — all moved higher last month, CIER said.
However, after seasonal adjustments, last month’s PMI grew only mildly from February, Wu said, adding that last month’s figure did not indicate an overheating economy.
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