Taiwan: Manufacturing activity growth largely stable in September
October 2, 2017
The manufacturing sector continued to expand at a solid clip in September, rounding off a quarter of upbeat operating conditions. The manufacturing Purchasing Managers’ Index (PMI), reported by Nikkei and IHS Markit, inched down from a five-month high of 54.3 in August to 54.2 in September. Despite the marginal decrease, the PMI remains well above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
Manufacturing output growth surged to a six-month high in September, likely reflecting higher production volumes of smartphones on account of the launches of iPhones X and 8. However, faster output growth was offset by slightly slower new business growth, particularly on the domestic front. The pace of job creation also decelerated slightly from August but remained strong this month. Outstanding work continued to mount through the month, although the rate at which it did so decelerated to its lowest pace in four months.
Buying activity also continued to grow as a result of strong production levels, albeit to slightly below August’s five-month high. Survey participants noted sharp increases in suppliers’ delivery times as suppliers struggled with shortages of raw materials. Regarding prices, higher purchasing costs and strong demand for raw materials caused input inflation to accelerate to one of the sharpest increases in the past six years, but firms were largely able to pass these costs onto customers.
Author: David Ampudia, Economist