The official manufacturing purchasing managers’ index (PMI) last month rose slightly to post 58.3 as operating conditions improved, but component shortages and port congestion limited growth, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The latest reading, which is just 0.5 points higher than in September, ended two consecutive months of slowdown and kept the reading in the expansion zone for the 16th straight month with all sectors reporting business increases, the data showed.
“In particular, manufacturers of chemical and biotechnology products, as well as those that produce food and textiles, posted a rebound, from a modest contraction one month earlier,” CIER president Chang Chuang-chang (張傳章) told a news conference in Taipei.
Photo: Wu Chia-ying, Taipei Times
The PMI aims to measure the health of the manufacturing sector, with readings higher than 50 indicating expansion and lower scores suggesting contraction.
The critical new business orders sub-index added 3.3 points to 56.8, as demand picked up in all sectors except suppliers of base materials, the monthly survey found.
Firms voiced concern over mounting inflationary pressures as material and component suppliers considered passing on cost increases induced partly by lingering supply disruptions and port congestions in the US, Chang said.
The sub-index on raw material prices rose 3 points to 80.9, while the reading for delivery times remained high at 65.7, although it was slowing from 69.1.
The situation sharpened cash burdens on mid and downstream players, who have difficulty delivering products to customers and therefore cannot settle accounts, Chang said.
The measure on export orders shed 4.6 points to 50.6, indicating that some international clients engaged in overbooking and had to slow their pace of inventory building, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said, adding that such adjustments were good for the industry.
The sub-index on the six-month outlook posted 54.2, softening 1.3 points from one month earlier, but all sectors had positive views, it said.
An energy crunch poses the biggest headache and could grow in severity, Lai said.
The non-manufacturing index rose 1.2 points to 58.5, augmenting for the fourth month, as companies reliant on domestic demand came out of the shadow of a COVID-19 outbreak earlier this year.
The improvement was most evident for eateries, hotels and real estate-related companies, it said.
The landscape looks bright for service providers, helped by a vibrant economy and government-backed stimulus vouchers, it said.
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