Sat, Nov 02, 2019 - Page 12 News List

Manufacturing PMI picks up: CIER

EXPANSION:After contracting since April and coming in flat in September, the index increased to 51.1 last month, driven by suppliers of food and textiles, the institute said

By Crystal Hsu  /  Staff reporter

The official manufacturing purchasing managers’ index (PMI) last month expanded for the first time since April, as food and textiles fared well, thanks to the high season and demand leading up to next year’s Tokyo Olympics, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.

Last month’s PMI reading of 51.1 indicated a business pickup for the nation’s manufacturing sectors, although companies engaged in the supply of raw materials, transportation tools, as well as electricity and machinery equipment remained in the woods.

Figures larger than 50 indicate an expansion, while values below the threshold suggest a contraction.

Manufacturing PMI was flat last month at 50.

“The advent of Christmas and the Lunar New Year is ramping up business for local makers of food, textiles and electronics,” CIER president Chen Shi-kuan (陳思寬) told a media briefing.

Seasonality had its strongest effect on suppliers of food and textiles, with the PMI reading rising to 60.3, the monthly report showed.

The critical sub-index on new business orders rose to 52.7, from 52 in September, as companies gained new orders from clients at home and abroad.

Taiwanese textile companies received an extra boost as the Olympics draws near, Chen said.

Taiwan supplies fabrics for global sportswear giants such as Nike, Adidas, Puma and Under Armour.

Ongoing anniversary celebrations by major local department store chains helped push up the index, reflecting healthy consumer spending, Chen said.

The sub-index on industrial production climbed from 51.9 to 55.4, while the gauge on employment grew from 48.8 to 50.6, as companies increasing hiring to meet better business demand, it said.

Business for electronics vendors remained vibrant, although the pace of increase lagged behind that seen by the textile and food sectors, Chen said.

5G technology, artificial intelligence and the Internet of Things would serve as the next catalysts for change in local technology companies’ business, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said.

While the impact of the US-China trade dispute has gradually waned, companies are generally conservative about the business outlook, the institute said.

The sub-index on business prospects in the next six months came in at 45.7, implying that a majority of respondents held negative views, it said.

The soft sentiment extended across almost all sectors, except for biotechnology, it said.

Separately, the operating condition for non-manufacturing sectors gained further momentum, raising the non-manufacturing index to 53.9 last month, from 51 in September, another survey by CIER showed.

Almost all service-oriented sectors reported business improvement except for companies in the wholesale business, it said.

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