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.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
RSS