Manufacturing activity slowed for the second straight month last month, as companies expressed concerns over lower-than-expected seasonal demand in the near-term future, according to a report released yesterday by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院).
The official purchasing managers’ index (PMI) slid 2.1 points from August to reach 53.3 last month, marking the lowest level since February, the Taipei-based think tank said in the monthly report.
However, the month-on-month decline of the index — a leading indicator of the economic outlook over the next three to six months — indicates that expansion is set to slow.
Photo: Wang Meng-lun, Taipei Times
The index comprises five major sub-indices: new orders, production, employment, inventories and supplier deliveries. A reading of 50 and above represents expansion and less than 50 signifies a contraction.
“Last month’s figures indicate industries have showed a relatively conservative attitude toward their businesses over the near future, with various industries gradually stepping into their traditional season,” CIER president Wu Chung-shu (吳中書) told a news conference.
The five major sub-indices all kept in the expansion zone last month, with the sectors of supplier deliveries and inventories both falling to their lowest levels for this year, the institute said.
Notably, the sub-index on employers’ outlook over the next six months — an indicator not included in the PMI’s five major sub-indices — stood at 54.1 last month, down 6.5 points from a month earlier and dropping below the level of 60 for the first time since December last year, the report’s data showed.
A separate report issued by HSBC PLC yesterday showed similar results, saying that the improving pace of manufacturing activity in the nation last month was the slowest since May, suggesting that the sector has lost some growth momentum.
The PMI reading collected by HSBC for Taiwanese manufacturers was 53.3 last month, down from the 40-month high of 56.1 recorded in August, according to the bank’s report.
Output growth for last month eased to its lowest level for the past year, but remained solid, while total new orders and new export orders increased at slower rates, with a moderate expansion of workforce numbers, the HSBC report said.
Hong Kong-based HSBC economist John Zhu (朱日平) said the fact that output prices in Taiwan were cut for the eighth month in a row last month, with input price inflation marking the lowest level in more than a year, suggested the recent strong growth is not inflationary.
“This should give the authorities plenty of room to keep policy accommodating to support growth,” Zhu said in the report.
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