The official manufacturing purchasing managers’ index (PMI) held surprisingly strong at 53.1 last month, as inventory demand bolstered suppliers of electronics and optical products, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
However, firms were downbeat about business in the next six months, as the COVID-19 pandemic is spreading in Europe and the US, hurting demand for exports, the Taipei-based think tank said in a survey.
Last month’s PMI reading rose 0.4 percentage points from a month earlier, as firms in the electronics, transportation and biotechnology sectors reported an improvement in business, while those selling food products, machinery equipment and basic raw materials reported negative cyclical movements, it said.
PMI figures aim to gauge the health of the manufacturing industry with values above 50 suggesting an expansion and below indicating a contraction.
The PMI increase had a lot to do with the sub-index on delivery time, which rose to 65.9, as the coronavirus outbreak disrupted work in China and delayed shipment schedules, CIER vice president Wang Jiann-chyuan (王健全) said.
Supply chain disruptions loom larger as India, Malaysia, Mexico and many other countries are shutting down non-essential businesses to combat the disease, Wang said.
The reading for the six-month outlook plunged to 28.7, the worst since the launch of the PMI index in July 2012, Wang said.
Firms across all sectors shared a gloomy outlook, despite resilient PMI showings in the first quarter, CIER said.
The sub-indices on new business orders and export orders remained in positive territory, with readings of 50.1 and 51.2 respectively, it said.
The industrial production and employment sub-indices contracted to 49.5 and 49.2 respectively, as companies became concerned about raising headcounts, the survey said.
The non-manufacturing purchasing managers’ index rose from 40.4 a month earlier to 42.3, but remained in contraction territory, CIER said.
Restaurants and hotels have especially felt the pinch, as well as companies in the retail sales, logistics, warehouse and financial service sectors, the survey said.
Companies in the wholesale, education and construction sectors managed to post a modest increase, it said.
Although the government has introduced relief measures, recovery remains elusive for tourism-related industries, Wang said, adding that the gauge on service-oriented firms’ six-month business outlook tanked to a record low of 13.7.
Consumer spending might rebound once the number of confirmed COVID-19 cases plateaus, the economist said.
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
RSS