Taiwan’s official manufacturing purchasing managers’ index (PMI) was 53.7 last month, marking a second consecutive month of expansion, although it slowed from 55.4 a month earlier, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The index, which seeks to gauge the health of the nation’s manufacturing industry, remained in robust territory, despite a mild slowdown that had to do with lingering concerns about geopolitical tensions and production cost increases, CIER acting chairman Wang Jiann-chyuan (王健全) told a news conference in Taipei.
PMI values of 50 or higher indicate expansion and figures below the threshold suggest contraction.
Photo: CNA
“Short and rush orders continued to prevail,” reflecting the cautious approach of customers at home and abroad in dealing with uncertainty, Wang said, citing a monthly survey of local firms.
The sub-index on inventory rose an insignificant 0.2 points to 49.4, while clients’ inventory rose 1 point to 43.1, although almost all sectors reported an increase in business, except for transportation tool makers, as they took a hit from US tax hikes on imported vehicles from China, CIER said.
Heightened US-China trade tensions prompted automakers in China to become more conservative about inventory buildup, which was unfavorable for Taiwanese suppliers of vehicle parts, Wang said.
Artificial intelligence (AI) remained the main growth driver, bolstering the readings on new business orders and industrial output to 59.2 and 56.4 respectively, although both dropped 4.6 points from a month earlier, the survey showed.
Semiconductor firms fared better than electronics makers and the trend would continue until the AI boom spreads from data centers and cloud services to downstream technology products, such as smartphones and personal computers, Wang said.
At the same time, the reading on employment gained 0.9 points to 51.2, indicating that firms largely relied on improving efficiency to meet business needs, rather than hiring new workers, the survey said.
The gauge on raw material prices declined 5.6 points to 60.5, remaining at a high level that would cause profit erosion, Wang said.
However, all manufacturing sectors remained positive about their business prospects due to the arrival of the high sales season, as the six-month outlook measure was 59.2, although it declined from 60.1 in May, the survey showed.
The non-manufacturing sector’s business gauge rose 4.4 points to 58.6, expanding for 20 months, thanks in part to TAIEX rallies that led investors to enjoy wealth gains, Wang said, adding that financial service providers were the biggest beneficiary.
That euphoria might extend into the summer, when overseas and domestic tourism companies embrace their peak season, Wang said.
That explained why the reading on the six-month outlook remained elevated at 61.5, with all sectors expecting business gains ahead, the survey showed.
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