Wed, May 04, 2016 page14

• PMI reaches 54.9, but low comparison mutes gains

  IMPROVING BUSINESS: Supply Management Institute official Steve Lai said Apple’s SE iPhones helped boost technology companies in the US firm’s supply chain

  • By Crystal Hsu / Staff reporter
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  The nation’s official manufacturing purchasing managers’ index (PMI) registered 54.9 last month, above the 50 threshold indicating improvement in the sector, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.

  However, the institute said the result for last month had more to do with a low base of comparison in February than signs of a recovery, because the reading after seasonal adjustments continued to contract, although at a milder pace.

  “A recovery remains elusive, even though the operating conditions showed improvement last month and beyond,” CIER president Wu Chung-shu (吳中書) told a news conference.

  The Nikkei Taiwan Manufacturing PMI arrived at similar findings, as the index stood at 51.1 on the back of new orders, according to a survey compiled by London-based research body Markit.

  With the exception of the food and textile sectors, firms reported improving business, raising the sub-index on new orders to 61.3 last month from 37 in February, the CIER report said.

  The launch of Apple Inc’s iPhone SE models last month boosted local technology firms in Apple’s supply chain, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said.

  The relatively low-priced SE series aims to fill the void ahead of the introduction of the iPhone 7 in September, Lai said, adding that consumers have given it a warm welcome so far.

  However, it remains to be seen if the excitement will turn out to be short-lived, as was the case for the iPhone 6S, he said.

  The US technology giant is tapping the software market by making its devices useful for professional baseball players in the analysis of moves by their rivals, Lai said.

  The expanded use might not translate into new business for Taiwanese contract makers in the short term, but things might change if they take advantage of the shift in tastes, he said.

  The CIER report showed that the output sub-index soared to 63.8 last month from 29.4 in February, while that for export orders rose from 42.1 to 56.6.

  The business landscape might continue to brighten, as the six-month outlook sub-index registered 51.8, meaning a majority of firms are expecting better prospects, the report said.

  The business upturn also extended to non-manufacturing sectors, with the non-manufacturing index climbing to 50.5 last month, from 42.9 in February, a separate CIER report said.

  However, service-oriented companies have a grim outlook in light of the six-month outlook standing at 38.1, the report showed.

  In particular, companies involved in property construction and brokerage remained a drag due to sluggish market demand, Wu said.
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