The official manufacturing purchasing managers’ index (PMI) last month climbed to 59.3, the highest since February 2018, as growth momentum gained traction, prompting companies to step up purchasing activity to meet customer demand, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
It was the fourth consecutive month that the index clocked positive movement in all sectors, lending support to a stable recovery for Taiwan’s export-oriented economy.
“We saw all sectors emerging from the COVID-19 pandemic, as well as a solid increase in new business orders and selling prices,” CIER president Chang Chuang-chang (張傳章) told a media briefing in Taipei.
Photo: Ritchie B. Tongo, EPA-EFE
The improvement was also evident in suppliers of machinery equipment and raw materials, which had lagged other sectors due to COVID-19 disruptions, he said.
PMI data aim to capture the health of the manufacturing industry, with scores of larger than 50 indicating expansion and values below the threshold suggesting contraction.
CIER’s sub-index on new business orders rose from 61.3 to 65.9, while that on industrial output climbed from 61.3 to 63.7. Both figures represented the fastest pace of increase in 44 and 34 months respectively.
Local companies raised headcounts to meet business needs, albeit at a slightly slower pace from September, CIER said.
The inventory gauge was 53.6 last month, little changed from 53.3 one month earlier, it said, adding that the inventory reading for customers rose from 42.5 to 45.8.
Firms are generally positive about the landscape moving forward, with the six-month business outlook sliding from 58.6 to 58.3.
Local companies are concerned about renewed lockdowns in European countries, but the degree of unease subsided from the second quarter, when the world was less prepared for the shock, Chang said.
The non-manufacturing index also stayed in expansion mode, despite losing 2.2 points to 53.4, CIER said.
However, business momentum weakened somewhat at hotels, restaurants and wholesale operators, the institute said.
Travel agencies have said that half of them could be forced out of business early next year if border controls remain in place for an extended period.
Meanwhile, IHS Markit’s PMI rose to 55.1 as it said last month’s data revealed a marked uptick in the health of Taiwan’s manufacturing sector, driven by sharper rises in output and total new work.
As a result, companies ramped up their buying activity and backlogs rose sharply, London-based IHS Markit said.
The manufacturing sector is on course for robust growth this quarter, thanks to the arrival of the high sales season for technology products, IHS Markit associate director Annabel Fiddes said.
The momentum was sustained despite the absence of inventory stockpiling by Huawei Technology Co (華為), as local firms on Sept. 15 stopped shipments to the Chinese company to conform with US sanctions, IHS Markit said.
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