The business climate monitor for the manufacturing industry in July turned “yellow-blue,” ending four months of recessionary state, as local firms benefited from the arrival of the high sale season for technology products, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The institute’s business composite index picked up 1.16 points to 11.13, as the readings on demand and operating conditions gained value, TIER said, adding that input and cost measures shed further points, while selling prices held steady.
“Tech firms spotted a rebound in new business orders but non-tech product makers remain weighed by poor market demand,” the institute said in a report.
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“The debt problems plaguing China’s developers and asset management companies add uncertainty to the market’s recovery,” it said, as nearly 40 percent of Taiwan exports head to China.
TIER uses a five-color spectrum to capture the industry’s health, with “red” indicating a boom, “green” suggesting steady growth and “blue” signifying a downturn. Dual colors indicate a transition to a better or worse state.
Taiwan houses the world’s major suppliers of electronics used in smartphones and artificial intelligence (AI) applications.
Firms in a transition state climbed to 34.38 percent, from 25.61 percent one month earlier, the institute observed. Firms trapped in business downturn eased from 66.58 percent to 45.68 percent.
A total of 17.72 percent reported steady growth and a slight 0.22 percent moved toward a boom, the institute said.
The improvement is evident among manufacturers of electronic components, thanks to a strong demand for AI devices and the upcoming release of new iPhone series, it said.
Operating conditions picked up for electrical and machinery equipment makers, lifting their business monitor to the zone of steady growth, but vendors of metal products floundered in the contraction territory. Upstream clients cut capacity to cope with tepid demand, it said.
Auto part makers benefitted from strong car sales in July when the number of new car plates grew 10.9 percent year-on-year to 42,400, the institute said.
However, input and demand lost steam after new car orders showed signs of retreat in the US and European markets, it said.
Makers of petrochemical, plastic and chemical products continued to struggle, as their orders, industrial output and selling prices have not yet stabilized, it said.
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