Taiwan: Manufacturing PMI deteriorates in August
September 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) fell to 58.5 in August from July's 59.7. As a result, the index remained entrenched above the 50-threshold, but signaled a softer improvement in business conditions from the previous month.
The lower reading was due largely to slower output growth, linked to material shortages and supplier delays, with backlogs of work rising as a result. New orders and new exports growth also ebbed, with the latter driven by the worsening pandemic abroad. Input and output price pressures were elevated, but both slipped compared to the previous month.
On the near-term outlook, Annabel Fiddes, economics associate director at IHS Markit, commented:
"While virus cases have been brought under control in Taiwan, it will be crucial for infection rates, largely driven by the Delta variant, to decline elsewhere in order for supply chains to normalise and capacity pressures to ease. Until then, it's likely that firms will remain under intense pressure to keep up with demand and costs could rise further as a result.”
Author: Oliver Reynolds, Economist