Taiwan: Manufacturing PMI rises to 27-month high in November

Manufacturing activity in Taiwan registered a sixth consecutive month of improving conditions, on the back of stronger production, improving new orders and a solid increase in delivery times. The Manufacturing Purchasing Managers’ Index (PMI), reported by Nikkei and IHS Markit, jumped from 52.7 in October to 54.7 in November. The PMI reached the highest level since August 2014 and moved further above the 50-point threshold that separates expansion from contraction in the sector.

Taiwanese manufacturing activity continued to perform solidly in the fourth quarter on the back of stronger production and total new work. According to IHS Markit, the latter was supported by faster growth in new exports. Due to rising volumes of new orders, Taiwanese goods producers saw their purchasing activity increase substantially. In terms of price developments, input prices increased from the previous month and at the steepest pace since 2011. As a result, manufacturers rapidly increased their output prices too. However, IHS Markit noted that, “[…] companies were relatively cautious towards their inventories holdings and staffing levels in November. Anecdotal evidence suggested that this was partly due to firms’ efforts to contain costs.”

FocusEconomics Consensus Forecast panelists expect investment to expand 1.0% this year, which is up 0.1 percentage points from last month’s forecast. For 2017, participants expect investment to increase 1.8%, which is unchanged from last month’s forecast.