The manufacturing purchasing managers’ index (PMI) last month rose to 51.7, ending five months of decline, as companies felt encouraged to rebuild inventory amid reports that the US and China are nearing a deal to resolve their trade dispute, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
Operating conditions brightened across all manufacturing sectors, with firms feeling upbeat about the business outlook in the next six months, the survey showed.
“Business activity regained traction after downside risks subsided,” CIER president Chen Shi-kuan (陳思寬) told a news conference. “Firms remain cautious, but are no longer pessimistic.”
The US and China might announce a trade deal later this month as negotiators have pushed to resolve a dispute that has seen a series of tariffs imposed and raised fears about spiraling economic damage.
Taiwan is home to the world’s largest contract suppliers of electronics used in smartphones, laptops and other electronic devices, with the US and China accounting for more than half of exports.
The subindex on new business orders shifted back to growth at 50.9, gaining 3.2 points from a month earlier, the CIER report said.
The measures on industrial production and employment picked up 1.7 and 3.3 points to 51.9 and 51.5 respectively, it said.
PMI readings aim to capture the health of the manufacturing industry, with values larger than 50 indicating expansion and lower suggesting contraction.
US President Donald Trump would like to bolster the US economy to help his re-election campaign next year, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said.
New export orders registered 56.7, comfortably above the neutral mark, despite a slight decrease from March, the report said.
The six-month outlook showed 55.7, accelerating from 52.1 a month earlier, as firms are positive about business going forward, it said.
China’s plan to strengthen imports to boost domestic demand would benefit Taiwanese firms, Lai said.
The gauge on input prices stood at 50.7, easing from 55.2, as raw material prices were relatively stable, CIER said.
Non-manufacturing sectors also reported improvement in operations, with the non-manufacturing index expanding for the second consecutive month to 55.6, the Taipei-based think tank said in a separate report.
Companies in almost all service-oriented businesses saw a pickup in sales, except for hotels and restaurants, the report said.
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