The nation’s manufacturing purchasing managers’ index (PMI) contracted last month, as the electronics sector improved, but most other sectors remained weak, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) officials told a news conference yesterday.
“Uncertainty has subsided, but overall operating conditions have stalled,” CIER president Chen Shi-kuan (陳思寬) said.
The reading came in at 48 last month, compared with 48.1 in June.
Scores larger than 50 point to an expansion, while values below the threshold suggests a contraction.
Business recovered to 51.6 for suppliers of electronics and optical devices, and accelerated to 59.7 for makers of textile and food products, which the institute attributed to the advent of the high season.
The sub-index on new business orders came in at 48.2, compared with 48.7 in June, dragged by companies selling chemical products, biomedicine, raw materials and machinery equipment.
The gauges on industrial output and employment posted mild growth at 50.3 and 50.1 respectively, as customers started to build inventory, according to CIER’s monthly survey.
Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said that Taiwanese exports have stabilized and should gain further momentum in the second half of the year.
Although the market is not expecting major breakthrough features for the new iPhone, the release of next-generation models would still spur replacement demand, Lai said.
The sub-index on raw material prices rose significantly from 40.7 to 49, while input prices climbed from 45.7 to 47.5, the survey showed, suggesting an approaching turnaround.
Companies in general remain cautious, but appear to be regaining confidence about the business outlook, Chen said.
That explained why the reading on the six-month business outlook rose from 42.9 to 49.3, he said.
A recovery in exports and resilient domestic demand might lend support to the nation’s economic growth, Academia Sinica Institute of Economics director Kamhon Kan (簡錦漢) said.
A separate survey by CIER showed that the non-manufacturing purchasing managers’ index gained 2.9 points to 54.9 last month.
All service-oriented sectors reported a pickup last month, Chen said, adding that department stores and restaurants should continue thriving with the upcoming Ghost Festival, Mid-Autumn Festival and anniversary promotions, Chen said.
However, hotels and recreation facilities might take a hit after Beijing banned individual tourists from visiting Taiwan, as of yesterday, he said.
The government has extended a subsidy program for domestic travel from next month to ease the impact.
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