Taiwan: Manufacturing PMI hits lowest level in nearly three years
September 1, 2015
The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, fell from 47.1 in July to 46.1 in August, thus hitting the lowest level since September 2012. As a result, for the fourth consecutive month the PMI is now further below the 50-threshold that separates contraction from expansion in the manufacturing sector.
According to Nikkei, August’s result came on the back of contraction in both output and new businesses, which dropped at sharpest rate in nearly three years. Weaker domestic and external demand prompted companies to cut their production for the fifth consecutive month. Moreover, in August, employment increased at a slower rate compared to the previous month. Markit analysts added that, “this downward trend may extend into the coming months unless there is a pickup in customer demand, with further falls in purchasing activity and inventories suggestive that production levels are unlikely to pick up in the near-term. Reduced output and increased deflationary pressures suggests that Taiwan’s central bank may start to mull over potential monetary easing measures to help stimulate growth.”