Taiwan: Manufacturing PMI rebounds in June
July 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, rose to 46.2 in June from 41.9 in May, thus pulling away from May’s 11-year low reading. However, the index remained below the 50-threshold signifying a marked deterioration in manufacturing conditions compared with the previous month.
The upturn was driven by slower declines in both output and new orders, which fell at the softest rates in three months. However, client demand both domestically and abroad remained subdued, weighing on new export orders, while employment levels continued to fall.
Regarding prices, input costs rose for the first time since March on the back of increasing raw material prices, while output costs fell in June amid tough market competition. Looking ahead, producers’ outlook lightened significantly, with firms projecting an increase in production over the next year amid expectations of improving demand once the pandemic is brought under control.
Commenting on the reading, Annabel Fiddes, associate director at IHS Markit, noted:
“[The] latest PMI data showed an easing in the downturn across Taiwan's manufacturing sector, giving hope that the worst of the COVID-19 induced decline is now behind us. Though still steep, the latest falls in output and new orders were the least marked since March, helped in part by looser restrictions related to COVID-19 across the world.”
Author: Stephen Vogado, Economist