The climate gauge for the nation’s manufacturing industry in February turned from “blue” to “yellow-blue,” supported by demand created by the deployment of 5G and other upcoming technologies, the Taiwan Institute of Economic Research (台灣經濟研究院) said yesterday.
The manufacturing business index compiled by the Taipei-based think tank was 11.7 in February, up 2.95 points from January, reflecting an uptick in input materials, demand, costs and selling prices, even though operating conditions weakened, the monthly survey showed.
Despite the improvement, companies across all sectors were pessimistic about the outlook in the next six months due to the COVID-19 pandemic and slumping crude oil prices, the institute said.
The institute uses a five-color system to gauge manufacturing activity, with “blue” suggesting a recessionary state, “yellow-blue” a sluggish state, “green” stability, “yellow-red” fast growth and “red” overheating.
The gauge for electronics sector was “green” thanks to demand for next-generation devices, high-performance chips and emerging technologies, the institute said in a report.
Growth momentum was most evident in the integrated circuits segment, which posted a 48.6 percent year-on-year increase, up from 6.7 percent a month earlier, the report said.
That suggested major technology brands had pressed ahead with plans to upgrade and update their product lines, but the pandemic could wreak havoc on demand should infections continue to spread and disrupt economic activity, it said.
Other sectors remained mired in a slowdown, the institute said.
The gauge for the petrochemical sector remained “blue,” as the pandemic caused a slump in demand for oil products, while wild price corrections hurt selling prices, the report said, adding that suppliers of chemical and base metal products were also negatively affected.
The machinery equipment sector fared better with a “yellow-blue” gauge, aided by increased demand from semiconductor firms and a low comparison base, the report said.
Transportation firms posted mixed results, it said.
The gauge for automakers and auto parts firms was “green” after a 39.25 percent year-on-year increase in new license plate registrations, while that for scooter makers was “yellow-blue” from “blue” as government subsidies shored up buying interest, the report said.
More working days compared with last year also lent strength to the improvement, it said.
That favorable comparison also benefited firms supplying livelihood products, as textile exports and output increased, despite the pandemic and an appreciation in the New Taiwan dollar, the report said.
Makers of wood and bamboo products faced growing competition from their peers in China, but technology upgrades had enabled them to carve out a niche market, it said.
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