The official manufacturing purchasing managers’ index (PMI) last month came in at 56.3, staying in the expansion zone for the 22nd month, but shedding 1.5 points from March, as mounting inflationary pressures and China’s COVID-19 lockdowns weighed on new orders and clouded the outlook, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究) said yesterday.
PMI data reflect the health of the manufacturing industry, with values larger than 50 suggesting expansion and scores lower than the threshold indicating contraction.
All manufacturing sectors reported that business improved last month, but were less upbeat about prospects as new orders posted their first decline in nearly two years, the monthly survey showed.
Photo: Clare Cheng, Taipei Times
“While generally positive, corporate managers voiced concern over steep production cost hikes in the wake of Russia’s invasion of Ukraine,” CIER president Chang Chuang-chang (張傳章) said, adding that China’s strict COVID-19 controls cramped demand and supply chain flows.
The critical measure on new orders shed 4.7 points to 47.7, the first time it fell below 50 in 21 months, as customers were hesitant about placing new orders in the face of uncertainty, the survey found.
The hesitance is especially obvious in the electronics sector, which saw new orders dive 10.1 points to 52.5, despite the advent of the high season, it showed.
The sub-index on industrial output lost 5 points to 50.2, while the reading on staffing expanded 0.5 points to 54.6, the survey showed.
Lockdowns in several cities in China drove up suppliers’ delivery time by 1.8 points to 67.4, CIER said, adding that raw material prices remained high at 84.1, although they eased by 3.4 points from one month earlier.
Manufacturers’ sentiment also weakened as the six-month outlook subsided 8 points to 52.9 last month, the lowest since July 2020. The sentiment at transportation tool makers, in particular, slid to 45.2 due to worsening component shortages, the survey found.
Among the six major industries in the PMI, the sub-indices for chemicals and biotechnology and basic raw material industries increased from a month earlier to 62.1 and 61.6 respectively, CIER said.
Meanwhile, the sub-indices for food and textiles, electronics/optoelectronics, electrical equipment and machinery, and transportation equipment rose to 59.6, 59.1, 58.1 and 56.2 respectively, it added.
The feeling of unease extended to non-manufacturing sectors.
The non-manufacturing index was resilient at 55.1, albeit down from 55.8 in March, with various sectors turning bearish about their outlook, a separate survey showed.
Apart from uncertainty abroad, companies reliant on domestic demand are taking another hard hit from a surge in infections of the Omicron variant of SARS-CoV-2, it said.
In the non-manufacturing index, the sub-index for new orders fell by 3.9 points from a month earlier to 52.8, while the sub-index on employment also dropped by 1.7 points to 53.1, while those for business activity and supplier delivery rose by 0.1 points and 2.6 points to 54.9 and 59.6, respectively, CIER said.
Hotels and restaurants, property builders and brokers, financial institutions, as well as wholesale operators, all share the dim view, Chang said, adding that their confidence was in free fall.
Additional reporting by CNA
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