The local manufacturing sector stayed in contraction mode for the fourth consecutive month last month amid continued weakness in global demand, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
Data compiled by TIER showed the composite index, which measures the fundamentals of the manufacturing sector, rose 0.36 points from a month earlier to 10.17 last month, but its business climate monitor remained “blue,” indicating contraction, because it was below the 10.5-point cutoff.
The think tank uses a five-tier system to assess economic activity in the sector, with “red” indicating overheating, “yellow-red” showing fast growth, “green” representing stable growth, “yellow-blue” signaling sluggish growth and “blue” indicating contraction.
Photo: CNA
As global consumption stayed weak, Taiwanese manufacturers saw a significant fall in the major indicators such as exports, export orders and industrial production, pushing down last month’s sub-index on purchases of raw materials by 0.09 from a month earlier, TIER said.
Last month, the sub-indexes on costs and demand also moved lower by 0.02 and 0.01 from May, while the sub-index on the general business climate bucked the downturn, rising 0.47 from a month earlier. In addition, the sub-index on pricing stayed unchanged.
TIER said the improvement in the general business climate came after a booming stock market amid hopes that the US Federal Reserve would pause its rate hike cycle in its policymaking meeting last month as well as a frenzy about the development of artificial intelligence.
However, the think tank said the rising popularity of AI applications failed to completely offset the impact from a global economic slowdown and inventory adjustments in supply chains worldwide.
As inflationary pressure remained and interest rates stayed high in the US and European markets, the local manufacturing sector remained under pressure, showing no immediate signs of recovery, the think tank said.
TIER’s survey found that 55.66 percent of respondents in the local manufacturing sector rated their business at “blue” last month, down from 65.78 percent in a similar poll conducted in May, while 37.05 percent rated their operations “yellow-blue,” compared with 20.86 percent in May.
In terms of individual industries, TIER said the electronic component industry remained “blue” for the seventh consecutive month last month as the industry saw production, exports and export orders falling more than 20 percent from a year earlier, resulting from continued inventory adjustments.
Due to weakening pricing power among steelmakers, the base metals industry remained “blue” for the 13th straight month last month, while solid demand for military products boosted prospects for the general business climate of the machinery industry, which was “green” for the third straight month last month.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS