Taiwan manufacturing remains on growth track

2014-08-05

Taiwan’s manufacturing growth expanded in July, reflecting the healthy state of the sector as the economy faces uncertainties at home and abroad.

The Purchasing Managers’ Index, which is based on a survey of the sector, increased from 58.2 in June to 58.5 in July. This was the third consecutive month the PMI topped 58, a long way above the 50 mark that separates expansion in activity from contraction.

“Such a result points to strong rates of growth and is more than satisfactory given current conditions,” said Wu Chung-shu, president of PMI complier Chung-Hua Institution for Economic Research Aug. 1.

Eight of the subindexes that comprise the overall benchmark continued to show signs of expansion, with new orders, employment and production registering accelerated growth.

The biggest gainer was new orders, up from 59.6 to 62.3. It was followed by employment, 56.8 to 59.2, while production increased from 61.7 to 62.2.

“The performance of the employment subindex is the second highest on record since the CIER began compiling the PMI,” Wu said. “This indicates a sectorwide drive to fill vacancies in anticipation of ramped-up demand.”

Increased demand put pressure on prices of electronic components and parts, driving up prices from 55.6 to 58, the highest since March 2013.

In terms of performance by industry, electronic and optical is the leader at 63.9, followed by machinery at 60.5 and transportation at 60. Of the six industry categories, only basic materials failed to grow.

Taiwan’s manufacturers remain cautiously optimistic about the future, with the half-year outlook at 65.5, the seventh month it has remained above 60 percent.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=220253&CtNode=413)