The manufacturing purchasing managers’ index (PMI) slowed to 53.9 last month from a month earlier, as operating conditions remained fair, but momentum subsided amid US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The sub-index for export orders showed a bleak outlook for the next six month, as it dropped below the neutral threshold for the first time in more than two years, with manufacturers expressing concern that the tariff row between the US and China was dampening demand for technology products, as shown by lackluster smartphone sales, the Taipei-based think tank said.
“The slowdown in the latest PMI data showed that Taiwan is taking a hit from the trade conflicts,” CIER acting president Wang Jiann-chyuan (王健全) told a media briefing.
The US seems to consider China its biggest economic competitor, and seeks to persuade companies to shift manufacturing bases from China to other countries, Wang said.
The development is unfavorable to China, which is Taiwan’s largest trading partner and accounts for more than 40 percent of outbound shipments.
PMI and non-manufacturing index (NMI) readings seek to gauge the health of the nation’s manufacturing and non-manufacturing sectors, with scores above 50 indicating business expansion, while values below the benchmark suggest contraction.
Almost all sub-indices shed points with the reading on new export orders shrinking from 52.9 points to 48.7 points, while business prospects over the next six months slipped from 54.1 points to 47.6 points, the CIER survey found.
“There is no denying that major economic data at home and abroad are losing steam, although the pace is benign thus far,” Academia Sinica’s Institute of Economics director Kamhon Kan (簡錦漢) said.
Tensions might continue for a while, as there are no concrete signs of rapprochement on the horizon, Kan added.
The Nikkei PMI survey showed similar results with a score of 50.8 points, marginally above the expansion mark.
Annabel Fiddes, principle economist at IHS Markit, which compiles the Nikkei survey, said that last month’s PMI data were disappointing, as readings for production and new orders declined for the first time in more than two years.
“Companies linked the fall in new business to softer demand at home and overseas,” Fiddes said in a statement.
Export sales declined at the quickest pace since early 2016 and firms cited weaker demand across key markets such as China, Europe and the US, the Nikkei survey showed.
Input prices and inventories rose only modestly, while employment expanded at a fractional pace, suggesting that conditions might remain muted for months, Fiddes added.
The slowdown extended to non-manufacturing sectors in Taiwan with the NMI falling from 52.6 points in August to 50.8 points last month, a separate CIER report showed.
At 44.8 points, the sub-index for service-oriented sectors indicated a bleaker outlook for the next six months, the report said, while sub-indices for restaurant operators and financial firms indicated the bleakest outlook with 30 points and 37 points respectively.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last