Manufacturing sentiment improved slightly last month after a second consecutive month of annual growth in exports, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The manufacturing sector’s cyclical movements surged to 11.61 points last month, up 0.88 points from a revised 10.73 points in May, the Taipei-based think tank said in its monthly report.
The cyclical movements which fell between 10.5 and 13 points last month made the sector flash a “yellow-blue” light — implying weak sentiment — for the third straight month, the report’s data showed.
“Despite industrial production and export orders both showing a year-on-year contraction last month, the continuous annual growth in exports and imports helped maintain sentiment in the manufacturing sector,” the report said.
A closer look at the manufacturing industry showed that the business climate for nearly all segments flashed “yellow-blue” readings in the first half of the year, on the impact of a continuous economic slowdown, which continued to drag down industrial production, exports and private consumption, TIER said.
The living commodities, electrics and electronics, chemistry and rubber, metal and machines, and transportation sectors were all rated “yellow-blue” in the first six months of the year, the report’s data showed.
Earlier this month, Gordon Sun (孫明德), director of the institute’s economic forecasting center, said sentiment in the second half of this year may show some rebound from the first half, citing strong seasonal demand during the period traditionally.
The latest survey of manufacturers showed a large number of respondents expected sentiment to improve over the next three to six months, despite expressing a cautious attitude toward the business climate for last month, Sun said.
However, the possible phasing out of quantitative easing in the US, the chance of the Japanese yen depreciating further, as well as the continuing economic slowdown in China may create some uncertainties for the manufacturing sector’s business climate, the institute said.