Tue, Apr 02, 2024 page12

• Manufacturing PMI retreats further

  SERVICES: While the non-manufacturing PMI showed signs of stabilizing, a concrete and even pickup will have to wait until global consumer markets recover, CIER said

  • By Crystal Hsu / Staff reporter
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  The nation’s official manufacturing purchasing managers’ index (PMI) last month shed a marginal 0.2 points to 47.9, dragged by soft new business orders and employment, but companies expressed more confidence about their business outlook, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.

  It was the 13th consecutive month the PMI remained in contraction mode, although most sectors reported that business improved, the Taipei-based think tank said.

  “The latest PMI stayed on a course of stabilization, but a concrete and even pickup will have to wait until global consumer markets recover,” CIER vice president Chen Shin-horng (陳信宏) said.

  

  Visitors inspect heavy machinery parts during the 2024 Taiwan International Machine Tool Show in Taipei on Wednesday last week. Photo: Ritchie B. Tongo

  Photo: EPA-EFE

  PMI data seek to measure the health of the manufacturing industry with values of 50 and higher suggesting expansion and points below the neutral threshold indicating contraction.

  The reading on new business orders lost 2 points to 46.9, although the gauge on order visibility climbed above the 50-point mark for almost all sectors except for suppliers of raw materials, the institute’s monthly report showed.

  The reading on industrial production fell 4.2 points to 47.3, while that on employment increased 1.2 points to 48.9, consistent with it being the slow season for technology products, it said.

  The inventory measure rose 2.4 points to 46.9, while the customers’ inventory reading gained 2.4 points to 42.9, both reflecting a conservative approach, the CIER report showed.

  Prudence is necessary and wise in light of rising raw material prices, which pushed the price index to 58.3, up 3 points from one month earlier, the report found.

  Despite the lackluster showing last month, companies are looking at improving business ahead as the six-month business outlook increased 2.4 points to 56.4, the fastest expansion since April 2022, with all sectors expressing optimism, CIER said.

  Local tech firms are benefiting from booming demand for artificial intelligence applications and services, Chen said.

  CIER also reported that non-manufacturing companies continued to enjoy sturdy business even though the holiday effect has faded, with the non-manufacturing index rising 1.2 points to 53.5.

  Most service providers are upbeat about business moving forward, encouraged by better GDP growth this year, the institute said.

  The S&P Global Taiwan PMI reached similar findings with a value of 49.3 las month, compared with 48.6 the previous month, with both output and new orders declining at modest rates.

  “Although the latest data showed a continued deterioration in the overall operating condition, it provided further signs that the Taiwanese manufacturing sector is moving closer to stabilization,” S&P Global Market Intelligence economic director Paul Smith said in a statement. “Signs of price and supply stability are helping support a more optimistic outlook.”

  However, demand for goods remains weak — from both domestic and international sources — leading firms to cut purchasing activity and exercise caution in dealing with inventory, Smith said.

  Companies demonstrated a preference wherever possible to utilize inventories and fulfill orders from warehouses
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