Taiwan PMI February 2016

Taiwan

Taiwan: Manufacturing PMI slips below the 50-treshold after three consecutive months of expansion

March 2, 2016

The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, fell from 50.6 in January to 49.4 in February. February’s reading marked the first month the Manufacturing PMI fell below the 50-threshold line after three consecutive monthly increases.

According to Nikkei, February’s reading reflects a contraction in output and new orders amid a weak economic outlook and softer demand. Fewer new orders enabled businesses to complete outstanding work and lower production contributed to softer employment growth in Taiwan’s manufacturing sector. Manufacturers also noted that production dropped in February for the first time in two months. As total new businesses fell, domestic and international demand eased, which resulted in new export work dropping at the sharpest rate since November.

Markit analysts added that “after a fairly positive start to the year, the latest batch of PMI data indicated a renewed contraction of Taiwan’s manufacturing sector in February. Output and total new work both fell for the first time in three months, while new export work fell markedly. According to respondents, poor economic conditions and weak foreign demand had weighed on the sector’s performance in the latest survey period. Overall, the data suggest that growth projections for the export-orientated sector remain on the downside, as companies face headwinds of a slowdown in the global economy and relatively weak domestic demand.”

FocusEconomics Consensus Forecast panelists expect investment to expand 2.2% this year, which is down 0.4 percentage points over last month’s forecast. For 2017, participants expect investment to increase 2.9%.


Author: Jean-Philippe Pourcelot, Economist

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Taiwan PMI February 2016

Note: Nikkei Taiwan Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and Markit.


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