Taiwan: Manufacturing PMI rises in July, but remains in contractionary territory
August 3, 2015
The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, rose from 46.3 points in June to 47.1 points in July. June’s result had marked the lowest level since September 2012. Despite July’s increase, the PMI remains below the 50-threshold that separates contraction from expansion in the manufacturing sector for the fourth consecutive month.
According to Nikkei, the result came on the back of a more moderate fall in new orders compared to June. However, production declined sharply in July, at a similar rate to June’s fall. Employment, a bright spot in the survey, increased overall, albeit modestly. Regarding inflationary pressures, low prices for raw materials contributed to the sharpest fall in prices in three months. Markit analysts added that, “Taiwan’s manufacturing sector had a disappointing start to the third quarter, with output, new orders and new export business all declining at historically sharp rates. It appears a global economic slowdown is likely to remain a headwind to growth in the second half of the year, as panelists mentioned softer demand in key export markets such as China, Europe and the US.”