Manufacturing activity last month remained in expansion mode for the 24th consecutive month, but uncertainty over the global economy is likely to affect the sector down the road, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
Data compiled by CIER showed that the seasonally adjusted purchasing managers’ index (PMI) rose slightly from a month earlier by 0.1 points to 53.6, largely due to an increase in the subindex for new orders.
The non-manufacturing index (NMI), which covers service sector activity, also moved higher by 4.6 points from a month earlier to 49.7, but the index stayed in contraction mode for the second consecutive month, the think tank said.
For the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.
Speaking at an online news conference, CIER president Chang Chuang-chang (張傳章) said that after China eased COVID-19 lockdowns last month, Taiwanese production showed signs of recovering.
Domestic production also recovered as COVID-19 infections eased after peaking in May, he said.
As a result, the subindex on production returned to expansion mode last month, rising 3.7 percent from a month earlier to 51.6.
Among the four other factors in last month’s PMI, the subindex for new orders rose 1.8 points from a month earlier to 47.4, but remained in contraction mode, while the subindices for employment and inventories rose 0.9 points each to 55.1 and 59.1 respectively.
Bucking the upturn, the subindex for supplier deliveries fell 6.9 points from a month earlier to 54.8 last month.
Chang said that orders placed last month were largely deferred orders, so the increase in the subindex does not indicate the manufacturing sector received large additional orders.
As for the business outlook over the next six months, the subindex fell 6.9 points from a month earlier to 37.1, the lowest since June 2020, when the figure stood at 33.7.
It was the second consecutive month the subindex has contracted, CIER said.
In terms of the six major industries in the PMI, only the subindices for food/textile and transportation equipment industries moved higher from a month earlier, CIER said.
The subindices for chemicals and biotechnology, electronics and optoelectronics, basic raw materials and electrical equipment industries moved lower from a month earlier, it said.
Citing a survey, Chang said with the exception of some food suppliers and select biotech firms, many in these major industries expressed concern over weakening demand after seeing their orders fall last month.
The global economy has shown signs of weakening, which has affected demand at a time when major central banks, in particular the US Federal Reserve, have started a rate hike cycle to fight inflation, Chang added.
As a result, despite a small recovery in last month’s PMI, the local manufacturing sector still faces uncertainty in the wake of such unfavorable circumstances, he said.
As for the NMI’s recovery, as the number of COVID-19 cases moderate, consumers appear more willing to spend and travel, he said.
Among the four NMI subindices, business activity, new orders and employment moved higher by 10.2, 8.8 and 1.5 to 48.0, 46.3 and 50.8 respectively, but the subindex for supplier deliveries moved lower by 1.9 to 53.8.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
RSS