Taiwan: Manufacturing conditions improve slightly in June
July 3, 2017
Operating conditions in Taiwan’s manufacturing sector improved marginally in June as both domestic and external demand improved through the month. The Manufacturing Purchasing Managers’ Index (PMI), reported by Nikkei and IHS Markit, edged up to 53.3 from 53.1 in May, which had marked a seven-month low. As a result, the index now lies further above the 50-point threshold which separates expansion from contraction in domestic manufacturing activity.
Faster rates of output and new orders growth were recorded in June. Survey respondents attributed the pick-up in new orders to improving demand dynamics both at home and overseas. In fact, new export orders rose at the second-quickest pace in nearly three years. Nonetheless, firms were somewhat cautious in expanding their staffing levels as to meet increased production requirements, with the rate of employment growth decelerating to a 20-month low. Employers’ reticence to hire more meant that backlogs of work mounted through the month at a sharp pace.
Manufacturing firms did, however, intensify their purchasing activities, helping lift overall stocks of both input and output goods. Nonetheless, some of these restocking operations were jeopardized by reported stock shortages at vendors, which in turn lengthened suppliers’ delivery times. Regarding prices, cost-push inflation decelerated to a one-year low, while average output charges outright decreased for the first time since August of last year. Survey participants reportedly linked lower output prices to fierce market competition.
Author: David Ampudia, Economist