Taiwan: Manufacturing PMI records worst reading since November 2020 in June
July 1, 2021
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 57.6 in June, down from May's 62.0. June's result marked the weakest reading since November 2020. Consequently, the index remained entrenched above the 50-threshold, but signaled a weaker improvement in business conditions from the previous month.
June’s reading was driven by slower growth in output and new orders, amid the resurgence in domestic Covid-19 infections and input shortages hitting production. Supply chain and input cost pressures remained intense, with output prices rising accordingly, albeit at a softer pace than in May. Moreover, business sentiment soured.
On the near-term outlook, Annabel Fiddes, economics associate director at IHS Markit, commented:
"To help control the virus the current Level 3 Covid-19 alert, which includes school closures, restrictions around gatherings, and a shift to remote working or staggered work schedules, has now been extended to mid-July. These guidelines, along with ongoing difficulties obtaining inputs, means that growth of the sector could cool further until conditions normalise.”
Author: Oliver Reynolds, Economist