Taiwan’s official manufacturing purchasing managers’ index (PMI) last month shed 1.5 points to 52.2, staying in expansion mode for the third straight month, although uncertainty linked to the US presidential race caused a stir, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The PMI published yesterday by S&P Global also showed that Taiwan’s factory activity continued to expand last month, falling to 52.9 from 53.2 in June.
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.
Photo: CNA.
“Things remain positive overall, but recent remarks by US presidential candidates revived concern over tariff hikes,” CIER president Lien Hsien-ming (連賢明) said.
Taiwanese firms turned from feeling upbeat to cautious after former US president and Republican Party presidential nominee Donald Trump said in an interview last month that Taiwan “took all of [the US’] chip business” and should pay the US for defense. Trump has also pledged to raise tariffs on imports to address what he calls unfair trade practices.
The subindex on new business orders weakened 5.3 points to 53.9, while the industrial production subindex lost 2.5 points to also reach 53.9, the Taipei-based think tank said, citing a monthly survey.
Tech firms generally saw their business pick up, but firms involved in the supply of transportation tools, basic raw materials and machinery equipment reported business decreases, the institute said.
Firms conservatively increased their payroll and sought mostly to meet demand by enhancing their operating efficiency, it said, explaining why the measure on employment added a tiny 0.7 points to 51.9.
The subindex on inventory lost 0.4 points to 49, while clients’ inventory gained 1.5 points to 44.6, consistent with a cautious approach, the survey showed.
The gauge on raw material prices dropped 3.2 points to 57.3, remaining elevated and a concern for margin pressure, the institute said.
The six-month outlook declined 4.2 points to 55, as the US presidential election affected corporate confidence while the high sales season draws near, it said.
The business reading on non-manufacturing sectors fell 1.3 points to 57.3, expanding for 21 consecutive months, with all service-oriented sectors faring well, the institute said in a separate survey.
Private consumption held strong even though the TAIEX pulled back and the central bank tightened credit controls, Lien said.
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