The manufacturing industry continued to pick up in July, although the pace of expansion slowed as a resurgence of COVID-19 infections abroad raised uncertainty, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The manufacturing business index compiled by the Taipei-based think tank shed 1.16 points to 16.52, signaling a “yellow-red” light again as it stayed in the expansion zone.
Values of 16 to 18.5 suggest a neutral-to-growth state and scores upward of 18.5 indicate a boom, while figures smaller than 13 signify a slowdown and values lower than 10.5 indicate recession, the institute said.
Photo: CNA
Taiwanese manufacturers have benefited from increased infrastructure spending by advanced nations to support their economies and an ongoing global supply chain realignment, TIER said.
This helps explain why the latest export order and industrial production data expanded by double-digit percentage points, it said.
However, the outbreak caused by the Delta variant of SARS-CoV-2 is escalating in the US, Europe and Southeast Asia, and has slowed the pace of growth for some sectors, it said.
The slowdown arose from slightly unfavorable movements on inputs, costs, demand and operating conditions, while selling prices gained further steam, it said.
The retreat is most evident in operating conditions, which lost 0.62 points, followed by a decline of 0.53 points in demand, a drop of 0.17 points in material input and a 0.03 point decrease in cost movements, it found.
Selling prices picked up 0.18 points across sectors as manufacturers announced price hikes to reflect more expensive raw materials and shipping charges, it said.
Suppliers of paper and textile products saw business improve, backed by increased demand from the end market at home and abroad, it said.
Petrochemical product makers saw orders and selling prices rise as demand for oil products, bicycle tires and infrastructure projects gathered traction, it said, adding that similar reasons shored up demand for base metal products and machinery equipment.
Global demand for electronics remains robust as 5G gadgets and high-performance computing gain importance and ramp up business at local component suppliers, it said.
By contrast, companies supplying transportation tools and auto parts took a hit from lockdowns in Southeast Asian markets to curb the COVID-19 pandemic, it said.
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