Manufacturing activity last month expanded for the 28th consecutive month, although the expansion rate tapered off to the slowest level in 18 months, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The purchasing managers’ index (PMI) moderated from a month earlier to 56.1, the slowest pace of expansion since January last year, when it stood at 53.2, the Taipei-based research body said.
The non-manufacturing index (NMI) rose from a month earlier to 57, marking the 17th straight month of expansion, the think tank said.
PMI and NMI readings aim to gauge the health of manufacturing and non-manufacturing sectors, with scores above 50 indicating business expansion, while values below the benchmark suggest contraction.
The PMI figure signaled that manufacturers became somewhat cautious because of continued trade tensions between the US and China, CIER president Wu Chung-shu (吳中書) said, adding that demand from overseas started to show signs of slowing.
The trend, if continued, would have a negative effect on local manufacturers, because many of them depend heavily on exports, Wu said.
Of the PMI’s five major sub-indices, only the sub-index for inventories increased, rising 0.5 from a month earlier to 55.1, the monthly report said, adding that the other indicators fell.
The sub-indices for new orders, production, employment and supplier deliveries fell from June, but stayed in expansion mode, despite the downturn, the report said.
Of the six industries covered by the PMI, electronics and optoelectronics firms fared stronger, as did food and textile manufacturers, it said.
The basic raw material, transportation, electricity, machinery, chemicals and biotech sectors saw weaker business performances, the report added.
However, the service sector benefited from the arrival of the peak summer season, CIER economist Chen Hsin-hui (陳馨蕙) said.
As for the NMI, the sub-indices for business activity and output, new orders and employment rose from a month earlier to 57.9.
Although the sub-index for supplier deliveries fell to 52.3 from June, it remained in expansion mode, the CIER said.
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