The official manufacturing purchasing managers’ index (PMI) climbed to 59.5 last month from 58.3 a month earlier, as new orders and labor recruitment continued to grow and production recovered, but the spread of the Omicron variant of SARS-CoV-2 in other countries has cast a cloud on prospects, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
PMI gauges the health of the nation’s manufacturing industry — scores above 50 indicate expansion and those below suggest contraction.
Last month’s number was far below the peak of 68.7 in April, but was the highest over the past three months and marked the second consecutive rise from a month earlier, indicating that manufacturing activity has recovered stably from its trough in September amid China’s power rationing and shipping disruptions, CIER said.
Photo: I-Hwa Cheng, Bloomberg
The sub-index on new orders rose from 56.8 a month earlier to 60.1 last month, mainly because orders for electronics and optical goods, which plunged in October, increased last month, as manufacturers finishing supply-chain adjustments, CIER president Chang Chuang-chang (張傳章) told a news conference in Taipei.
The sub-index on production rose by 4.6 points to 60.5 last month, compared with a fall of 1.1 points in October, while labor recruitment rose one point to 56.2 last month, CIER data showed.
The two figures last month were higher than their respective lows of 54.5 and 57 in September, the data showed.
The six-month business outlook increased by 3.7 points to 57.9 last month, the highest over the past three months, but purchasing managers’ expectations for the economy would inevitably be affected by the emergence of the Omicron variant, Chang said.
“So far, no manufacturer has been really affected by the Omicron variant, but the uncertainty brought in by the new variant would adversely affect the economy. [US] Federal Reserve Chairman Jerome Powell has said that the variant might slow recovery in the US economy and labor market,” Chang said.
However, if Taiwan could continue enforcing solid disease prevention measures to keep the virus at bay, it could keep the variant’s impact on the economy to a minimum, Chang said, adding that the nation’s rising vaccination rate could alleviate concern among investors and purchasing managers.
It was the 17th month that Taiwan’s PMI stood above 50, CIER data showed.
All six major sectors’ PMIs were higher than 50 last month, but only three sectors posted significant growth — with chemical and biotechnology rising from 53.2 to 59, electronics and optical increasing from 56.6 to 60.2 and transportation rallying from 54 to 57.1, the data showed.
In contrast, the PMI for food and textiles fell from 66.7 to 60.4 and the one for raw materials dipped from 54 to 53.7, the data showed.
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