The official manufacturing purchasing managers’ index (PMI) last month gained 2.7 points to 48.2, indicating that operating conditions remained weak altthough order visibility and industrial production improved, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“Some sectors saw their business return to the positive zone, thanks to rush orders linked to artificial intelligence applications,” CIER president Yeh Chun-hsien (葉俊顯) told reporters.
Firms largely remain conservative due to tepid end-market demand and expect a recovery next year until the Lunar New Year, Yeh said.
Photo: Hsu Tzu-ling, Taipei Times
PMI data aim to capture manufacturing industry health, with scores of 50 and higher indicating expansion and scores lower than the threshold suggesting a contraction. The crucial economic indicator has contracted for seven months in a row.
The sub-index on new business orders rallied 5.1 points from one month earlier to 51.7, while the gauge on industrial production picked up 6.2 points to 52.9, returning to positive territory, the monthly report said.
Rush orders benefited firms that make chemical, biotechnology, electronic, optical, food and textile products, as well as transportation tools, Yeh said, adding that the improvement failed to extend to suppliers of raw materials, and electrical and machinery equipment.
The launches of next-generation technology gadgets lent support to inventory rebuilding demand as the holiday season in the West draws near, accounting for the uneven recovery, the academic said.
The readings on inventory and customers’ inventory both shed 0.4 points to 45.4 and 44.1 respectively, the think tank said.
The sub-index on employment increased a slight 0.6 points, indicating that firms hesitated to raise headcounts, and would rather take a cautious approach for fear that the improvement would be short-lived, it said.
The measure on raw material prices grew 5.5 points to 58.7, as oil exporters cut supply to bolster prices, explaining why firms were afraid to pass on cost hikes, it said.
The six-month business outlook sub-index advanced 2.6 points to 44.7, given that only firms in the chemical, biotechnology and food sectors are upbeat about order visibility, the report showed.
The non-manufacturing index last month printed 53.5, expanding for an 11th straight month, but weakening 0.8 points from one month earlier, CIER said.
Yeh linked the mild signs of a slowdown to stock price corrections and outbound travel growing faster than domestic tourism.
Demand remains healthy for most service sectors and upcoming holidays might fuel growth momentum, he said.
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