The official manufacturing purchasing managers’ index (PMI) was 54.5 last month, marking its eighth consecutive month of expansion, although growth slowed from September’s reading of 56.5, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The PMI is a gauge of the health of the manufacturing industry, with scores above 50 indicating expansion and scores below the threshold suggesting contraction.
The recovery failed to extend to service-oriented firms, with the non-manufacturing index sliding to 49.4, despite the high sales season, ending four months of gains.
“The manufacturing industry is still on course for recovery, despite the slowdown in pace,” CIER president Wu Chung-shu (吳中書) told reporters.
Of the six major manufacturing industries, all but electrical and machinery equipment suppliers stepped up purchasing activity to meet growing demand, both domestically and from abroad, the report said.
The sub-index on new business orders was 55, down from September’s 59.3, while new export orders were 54.7, down from 56.6, the report said.
The data suggest that high-
season sales might have peaked for Taiwanese firms in the upstream supply chain of global consumer electronics brands.
The private Nikkei Taiwan Manufacturing PMI showed similar results, with a reading of 52.7.
“Taiwan’s manufacturing industry saw a solid start to the fourth quarter, with the upturn looking broad-based and sustainable,” said Annabel Fiddes, an economist at IHS Markit, which compiles the Nikkei survey.
However, companies are cautious about payroll expansion, with the employment index rising only marginally, the Nikkei report said.
Input costs rose significantly, but firms raised output charges modestly to stay competitive and win customers, the report said.
Chemical products, electronics and food makers are upbeat about business performance, while basic materials, transportation, tool and machinery equipment vendors expect business to slow, CIER said.
The six-month outlook index was 51.8, down from 53.5 in September, Wu said.
The confidence level is weaker in non-manufacturing sectors, with the six-month index registering 39.4, the CIER report said.
The sluggish turnover on the local bourse is worrying for financial and insurance service providers, while a sharp decline in the number of tourists is unfavorable for hotels, restaurants and retailers, Wu said.
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