The climate monitor for Taiwan’s manufacturing industry last month flashed “green” for the fifth consecutive month, indicating that operations held steady, despite uncertainty due to worsening inflation and geopolitical tensions, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The composite index for the manufacturing industry rose 0.92 points to 15.16, as the readings on input and demand increased, while the measures on the operating environment and selling prices decreased, the Taipei-based think tank said, adding that the cost gauge stayed unchanged.
Export orders and industrial output rose by double-digit percentage points in February, thanks to a continued recovery in the global economy, the institute said.
Photo: Yang Chin-cheng, Taipei Times
However, the war between Russia and Ukraine pushed up international crude oil and raw material prices, and triggered panic sell-offs across global bourses, weighing on operating confidence, it said.
TIER uses a five-color system to measure the industry’s health, with red indicating a boom, yellow-red suggesting an uptrend, green indicating a stable state, yellow-blue signaling a slowdown and blue representing a contraction.
The input side reported the fastest advance of 1.17 points, while demand added a fractional 0.39 points, the institute said.
The climate for manufacturers of livelihood goods, such as textile products, yielded a yellow-red signal, as selling prices picked up on the back of an improving global economy, it said.
Paper product makers also posted a red signal, as they benefited from a seasonal increase in purchasing activity, it said.
However, a lack of cotton and other raw material supplies limited growth, it added.
Suppliers of petrochemical products fared strongly, as crude oil product prices grew more than 10 percent, allowing exports of related products to more than double, it found.
Soaring oil prices took a toll on manufacturers of plastic and rubber products, dragging their gauge into sluggish territory, it said.
Domestic steelmakers saw their business and selling prices thrive, backed by demand from infrastructure enhancement projects in major economies, it said.
China’s economic slowdown put pressure on local suppliers of machinery equipment, it said.
Electronic component vendors continued to enjoy support from digital transformation and emerging technologies, but material and labor shortages constrained business, it said.
Makers of auto parts said business slackened, as evidenced by a 10 percent drop in auto sales, it said, attributing the decline to a persistent chip shortage that hampered auto production in the US and Europe.
Sales of motorcycles rose 3 percent, but component price hikes and government subsidy exits prompted makers to turn conservative about input amid concern over lackluster sales ahead, it said.
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