Taiwan PMI

Taiwan

Taiwan: Manufacturing PMI in October inches up but remains entrenched in contraction territory

November 2, 2015

The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, rose from 46.9 in September to 47.8 in October, which marked a five-month high. Despite the increase, this is the sixth consecutive month in which the PMI is below the 50-threshold, which separates contraction from expansion in the manufacturing sector.

According to Nikkei, October’s result came on the back of a less-pronounced contraction in both output and new orders—both contracted at the slowest rate in five months. Companies continued to cut back on input buying while simultaneously continuing with destocking activities as client demand has deteriorated. More importantly, employment eased to a 29-month low in October mainly due to weaker demand. Markit analysts added that, “softer customer demand amid weak economic conditions continued to weigh on the sector’s performance. Consequently, firms were increasingly cautious towards job hiring, raising their staff numbers at the slowest rate for nearly two-and-a-half years.”

FocusEconomics Consensus Forecast panelists expect investment to expand 1.3% this year, which is unchanged over last month’s forecast. For 2016, participants expect investment to increase 2.5%, which is also unchanged from last month’s forecast.


Author: Jean-Philippe Pourcelot, Economist

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Taiwan PMI October 2015

Note: Nikkei Taiwan Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and Markit.


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