CHINA
Factory activity up a little
Factory activity improved slightly last month, according to official data published yesterday, showing a small rebound in the economy ahead of the week-long National Day public holiday. The purchasing managers’ index increased slightly to 51.5 after slipping to 51 in August. Any figure above 50 points represents growth while below that signals a contraction. The National Bureau of Statistics said that the figures, with increases in several key indices, demonstrated a “steady recovery” and a pre-holiday consumption boom, but it added that some industries, such as apparel, textile and wood processing, reported insufficient market demand.
SAUDI ARABIA
Economy shrinks 7 percent
The economy contracted 7 percent in the second quarter from a year earlier, as citizen unemployment hit its highest level on record, illustrating the damage wrought by oil market turmoil combined with the COVID-19 pandemic. The oil sector shrank 5.3 percent annually, while the non-oil sector declined 8.2 percent, General Authority for Statistics data released yesterday showed. The non-oil private sector contracted by more than 10 percent. Labor statistics released at the same time showed that citizen unemployment rose to 15.4 percent during April to June, the highest level recorded in data that goes back two decades.
UNITED KINGDOM
GDP drop less than forecast
The economy did not contract as much as originally thought during the second quarter of the year when COVID-19 lockdown measures were at their most intense — although the slump remained the worst on record and the biggest of all major economies. The Office for National Statistics yesterday said that the economy contracted 19.8 percent in the April-to-June quarter from the previous quarter, slightly less than its previous estimate of 20.4 percent. However, the economy contracted more than previously thought during the first quarter, it said, adding that it now estimates that the economy shrank by 2.5 percent in the first quarter, against 2.2 percent previously.
GERMANY
Unemployment drops
Unemployment declined for a third month as Europe’s largest economy is gradually recovering from the pandemic shock. A drop of 8,000 last month left the total number of jobless people at 2.91 million, the Federal Employment Agency said yesterday. The jobs market is being propped up by government subsidies, with close to 4 million workers on furlough programs, estimates by the Ifo Institute showed. Germany’s unemployment rate eased to 6.3 percent last month. The Bundesbank said that it expects the overall economic recovery to progress at a slower pace during the rest of the year.
UNITED STATES
Consumer confidence up
Consumer confidence jumped to 101.8 last month, The Conference Board reported on Tuesday, ending months of decline with a 15 point-plus gain from August despite no new federal stimulus. Outlooks for the labor market and general business conditions improved, the research firm said. The Conference Board said that the present situation index measuring consumers’ assessment of current conditions rose to 98.6 from 85.8 in August, while the expectations index tracking assessments of short-term business, employment and income expectations shot up more than 17 points to 104.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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