Taiwanese manufacturers are looking at an improvement in their operating conditions in the second half of this year, but most would not be running at full capacity due mainly to a lack of business orders, among other things, the Chung-Hua Institution for Economic Research (中華經濟研究院) said yesterday.
The semiannual survey on the manufacturing purchasing managers’ index (PMI) printed 53.8 in the first six months, emerging from a downturn in 2022 and last year, the Taipei-based think tank said.
The confidence gauge on business outlook reached 67.7 for the second half of this year, signifying better order visibility with the advent of the high sales season for technology products.
Photo: Chen Wen-chan, Taipei Times
The PMI aims to measure the health of the manufacturing industry, with scores higher than 50 suggesting an expansion and scores below the threshold indicating a contraction.
Despite the upturn, 81.9 percent of the firms did not operate at full capacity due to insufficient demand at 82.8 percent, a shortage of workers at 24.5 percent and increased costs at 16.2 percent, the survey found.
Firms by and large expect their revenue to rise 2.62 percent this year, while their average selling prices and capacity utilization to grow 0.89 percent and 1.07 percent respectively from the levels seen last year, it said.
Overall capital spending would expand 3.3 percent, up 1.71 percent from a year earlier, while the indicator on profit margin would climb to 57, it said.
Only 24.9 percent of firms said that they are taking part in the artificial intelligence (AI) supply chain and 49.8 percent plan to assess whether to introduce the expensive operating systems, the institution said.
Of the AI participants, 41.9 percent are in the research-and-development stage, 16.2 have finished research and development but have not entered mass production and 41.9 percent have launched products, it said.
Firms that embrace AI are counting on the technology to boost their operating efficiency and save labor costs, the institute found.
Another 50.2 percent of firms said that they have no intention of introducing AI technology or conducting an assessment on the grounds it would not affect their operations, the institution said.
International fuel and raw material prices sit atop the list of concerns of local firms, followed by US economic trends and foreign exchange movements, it said.
Taiwan’s ties with China ranked fourth and China’s economy was in fifth, it said.
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