IHS Markit’s Taiwan manufacturing purchasing managers’ index (PMI) last month climbed to a decade-high of 59.4 as firms reported a sharp increase in new business and output amid soaring input costs and worsening supply delays.
PMI figures seek to show the health of the manufacturing industry, with scores above 50 indicating expansion and values below indicating contraction.
Last month’s score rose from 56.9 in November, signaling the strongest pickup in operating conditions since January 2011, the monthly survey showed on Monday.
Photo: Sam Yeh, AFP
“Taiwan’s manufacturing sector had a strong end to last year, with firms registering the steepest upturns in output and new orders for nearly a decade,” IHS Markit economics associate director Annabel Fiddes said in a statement.
Rising inflows of new work prompted firms to expand purchasing activity at a rapid rate, Fiddes said.
The new business gauge expanded at the sharpest rate in a decade, with firms citing a further rebound in sales as the effects of the COVID-19 pandemic continued to unwind, she said.
Growth in new exports also hit a near-decade high, as companies reported stronger demand in many of the nation’s major external markets, the survey found.
The data also pointed to renewed increases in pre and post-production items, as firms stockpiled goods amid strained supply chains and greater customer demand.
Although firms registered steeper increases in production and sales, they adopted a cautious approach to staffing levels, which drove a rapid increase in work backlogs, IHS Markit said, adding that backlogs increased at the sharpest rate since February 2018.
Stock shortages, limited capacity and port delays led to a substantial lengthening of suppliers’ delivery times, it said.
Supply shortages and delays contributed to a substantial rise in input costs, which led to a marked increase in output charges, it added.
Average input prices rose at the steepest rate since December 2016, driven by increased raw material prices and stock shortages, IHS Markit said.
To help maintain profit margins, firms passed on higher operating expenses to customers by raising selling prices at the quickest pace since March 2011, it said.
Encouragingly, firms reported greater demand at home and abroad, with growth in export sales rising to its highest level in nearly 10 years, Fiddes said.
Expectations that global demand conditions will continue to improve over the months ahead boosted business confidence to a 33-month high, she said.
However, supply chain disruptions, rising costs and the resurgence of COVID-19 infections in several export markets could weigh on growth, she added.
SELL-OFF: Investors expect tariff-driven volatility as the local boarse reopens today, while analysts say government support and solid fundamentals would steady sentiment Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement. Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions. Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in
A wave of stop-loss selling and panic selling hit Taiwan's stock market at its opening today, with the weighted index plunging 2,086 points — a drop of more than 9.7 percent — marking the largest intraday point and percentage loss on record. The index bottomed out at 19,212.02, while futures were locked limit-down, with more than 1,000 stocks hitting their daily drop limit. Three heavyweight stocks — Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Hon Hai Precision Industry Co (Foxconn, 鴻海精密) and MediaTek (聯發科) — hit their limit-down prices as soon as the market opened, falling to NT$848 (US$25.54), NT$138.5 and NT$1,295 respectively. TSMC's
TARIFFS: The global ‘panic atmosphere remains strong,’ and foreign investors have continued to sell their holdings since the start of the year, the Ministry of Finance said The government yesterday authorized the activation of its NT$500 billion (US$15.15 billion) National Stabilization Fund (NSF) to prop up the local stock market after two days of sharp falls in reaction to US President Donald Trump’s new import tariffs. The Ministry of Finance said in a statement after the market close that the steering committee of the fund had been given the go-ahead to intervene in the market to bolster Taiwanese shares in a time of crisis. The fund has been authorized to use its assets “to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan’s
In a small town in Paraguay, a showdown is brewing between traditional producers of yerba mate, a bitter herbal tea popular across South America, and miners of a shinier treasure: gold. A rush for the precious metal is pitting mate growers and indigenous groups against the expanding operations of small-scale miners who, until recently, were their neighbors, not nemeses. “They [the miners] have destroyed everything... The canals, springs, swamps,” said Vidal Britez, president of the Yerba Mate Producers’ Association of the town of Paso Yobai, about 210km east of capital Asuncion. “You can see the pollution from the dead fish.
RSS