Taiwan: Manufacturing PMI hits new 11-year low amid coronavirus fallout
The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, fell to 41.9 in May from 42.2 in April, in the process hitting a new lowest level since January 2009. As a result, the index remained significantly below the 50-threshold signifying a marked deterioration in manufacturing conditions compared with the previous month.
The downturn was driven by steep drops in both output and new orders as the coronavirus pandemic continued to impair manufacturing conditions in May amid subdued demand across key export markets—foreign sales fell at the fastest rate this month since the start of 2009. As a result, firms cut workforce numbers and reduced buying activity with supply chain disruption leading to significantly longer delivery times.
On the price front, both input and output costs fell in May on weak demand. Looking ahead, producers remained downbeat as lingering uncertainty regarding the overall impact of the pandemic tainted sentiment.
Commenting on the reading, Annabel Fiddes, principal economist at IHS Markit, noted:
“As the outlook for recovery remains uncertain, Taiwanese goods producers cut back on their staff numbers, purchasing activity and inventories, with firms anticipating a tough summer and a slow path to recovery.”