Taiwan: Manufacturing PMI inches up in November and edges closer to the 50-point threshold
December 1, 2015
The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, rose from 47.8 in October to 49.5 in November, marking an eight-month high. Despite the increase, the PMI remains just below the 50-threshold which separates contraction from expansion in the manufacturing sector. Taiwan’s manufacturing PMI has been below the 50.0 point threshold since April of this year.
According to Nikkei, November’s result came on the back of a fall in total new work as demand from overseas markets eased. New export work dropped notably, with the rate of decline accelerating over the previous month. The rate of decline for total new work, however, recorded the slowest rate of decline in six months. In addition, purchasing activity and new orders declined for the eighth consecutive month. The drop in new orders contributed to a further decline in stocks of inputs and inventories of finished goods.
Markit analysts added that, “business conditions deteriorated only slightly in Taiwan’s manufacturing sector in November, helped by softer falls in output and new orders. This suggests that the sector is edging closer to stabilisation after a disappointing performance through most of 2015. […] However, a steeper decline in new export business was a worrying development in the latest survey, as demand in key export markets remains relatively subdued. Staff hiring policies also suggested companies remain relatively cautious towards the business outlook, as employment growth was little-changed from October and only marginal.”