The official manufacturing purchasing managers’ index (PMI) last month soared to another high of 68.7, as economic activity at home and abroad continued to accelerate, ramping up business at local firms across sectors, the Chunghua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“The nation’s economy looks healthy considering all measures, but industry should remain cautious about uncertainties linked to the COVID-19 pandemic,” CIER president Chang Chuang-chang (張傳章) said.
Chang had expected Taiwan’s economy to plateau this quarter, but there are reasons to expect the growth to continue, he said.
Photo: Billy H.C. Kwok, Bloomberg
Many Taiwanese firms posted strong earnings for last quarter with positive guidance for the rest of the year, as major economies emerge faster than expected from the pandemic.
The subindex on new orders picked up 11.1 points to 71.6, the highest since the launch of the survey in July 2012, as all manufacturing sectors experienced a boom, the Taipei-based institute said.
PMI data aim to capture the pulse of the manufacturing industry with points larger than 50 indicating expansion and values lower than the threshold suggesting contraction.
The reading on new orders spiked to 76.4 for the electronics sector and surged to 88.9 for electrical and machinery makers, the report showed.
The subindex on industrial production increased 11.7 points to 70.9, while the measure on employment added 4.8 points to 63.8, it said.
Delivery time edged up 0.1 points to a record 74.8, reflecting shipping capacity shortages and delays, it said.
Meanwhile, raw material prices skyrocketed, keeping the subindex at 90.1, above the 90 level for two consecutive months, it said.
The inventory gauge for local firms was 62.3, up 2.4 points from 59.9 in March, while clients’ inventory advanced at the same pace to 47.6, weighed by material shortages and shipping delays.
Global technology companies and automakers have had to slow production due to lingering component shortages.
Firms across sectors are upbeat about their business, raising the six-month outlook to an unprecedented 79, it said.
Steve Lai (賴樹鑫), executive director at the Supply Management Institute in Taiwan (中華採購與供應管理協會), said that companies must not let their guard down, as virus infections escalate in India and there have been signs of an increase in Taiwan.
The non-manufacturing index increased 4.9 points to 60.1, the strongest since August 2014, indicating that service-focused companies have also benefited from the economic growth.
Business in almost all non-manufacturing sectors improved except restaurants and hotels, the report found.
Restaurants and hotels are optimistic about business in the next six months, due to the summer vacation period.
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