The manufacturing purchasing managers’ index (PMI) stood at 53.4 last month, marking its 11th consecutive month of expansion, although growth decelerated from December’s reading of 55.9, the Chung-Hua Institution for Economic Research (中華經濟研究院) said yesterday.
The PMI gauges the health of the local manufacturing industry, with scores above 50 representing an expansion and those below the threshold suggesting a contraction.
The month-on-month decline in PMI last month could be mainly attributed to the slower growth of local companies’ new orders and slower production, the Taipei-based think tank said.
The index consists of five major sub-indices: new orders, production, employment, inventories and supplier deliveries.
The sub-index on new orders decreased from 57.3 in December to 51.4 last month, while the sub-index on production also dropped from 59.5 to 50.3, the report said.
The decline in the two major sub-indices was due to fewer working days because of the Lunar New Year holiday, Chung-Hua Institution for Economic Research president Wu Chung-shu (吳中書) told a news conference in Taipei yesterday.
“However, the latest PMI data still indicate a stable recovery for the nation’s manufacturing industry, as the index was still higher than the 50-point threshold,” Wu said.
The positive performance last month was supported by high expectations for the new iPhone and an improvement in the global economy, he told reporters.
Companies in almost all manufacturing sectors are upbeat about their business outlook for the next six months, with the six-month outlook index up from 59.8 to 61.5, the report showed.
Firms engaged in supplying basic raw materials were the only exception, due to concerns over fluctuations in crude oil and commodity prices, Wu said.
Non-manufacturing sectors last month also remained above the 50-point threshold, with the non-manufacturing index rising to 54.1 from 51.3, with all non-manufacturing sectors registering growth, the institute said in a separate report.
Food and textile vendors built up inventory ahead of the Lunar New Year holidays to meet strong demand over the period, which helped lift the index, Wu said.
Despite robust business activity last month, the think tank said that service-oriented firms are generally pessimistic about market sentiment in the coming six months, except companies in the education and communication industries.
The sub-index on the six-month outlook remained below the threshold at 45.6, down from 47 in December, marking its 20th consecutive month of decline, the report showed.
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