Taiwan PMI September 2016


Manufacturing PMI hits two-year high in September

Taiwanese manufacturers registered better business conditions for the fourth consecutive month in September. The Manufacturing Purchasing Managers’ Index (PMI), reported by Nikkei and IHS Markit, rose from 51.8 in August to 52.2. The Manufacturing PMI reached the highest level since September 2014 and moved further above the 50-point threshold that separates expansion from contraction in the sector.

September’s reading reflected a strong increase in both output and new orders, supported by higher export sales. Due to strong growth in output, firms indicated again in September that they had hired more employees and that their purchasing activity had increased. That said, Nikkei and IHS Markit cautioned that September data point to a relatively cautious approach to manufacturing production, which increased but at the slowest pace in four months. Meanwhile, respondents to the September survey indicated that they boosted their purchasing activity and renewed inventories. Regarding prices, Taiwanese goods producers signaled that input prices rose notably in September—the second-strongest increase in two years—while output prices rose only timidly over the previous month.

In a statement, Nikkei and IHS Markit said that, “companies remained relatively cautious towards their production schedules, raising output only marginally, while jobs growth also slowed since August. This contributed to further pressure on operating capacity, as shown by backlogs of work rising markedly over the month.”

FocusEconomics Consensus Forecast panelists expect investment to expand 0.9% this year, which is down 0.3 percentage points over last month’s forecast. For 2017, participants expect investment to increase 1.9%.

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Taiwan PMI Chart

Taiwan PMI September 2016

Note: Nikkei Taiwan Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and IHS Markit.

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