Taiwan’s PMI inches back in October

2014-11-05

The Purchasing Managers’ Index for Taiwan in October was 51.5 percent, down 1.8 percentage points from the month before, according to PMI compiler Chung-Hua Institution for Economic Research Nov. 3.

“Taiwan’s manufacturing sector continues to grow but at a slower rate,” CIER President Wu Chung-shu said. “While the result is above the 50-mark separating expansion in activity from contraction, it is the third drop in a low and the slowest growth since March this year.”

According to Wu, the decrease is most likely connected with public concern over recent lard-based oil scandals. “This shows that the issue of food safety is spreading to other areas of activity such as exports and tourism,” he said.

“Until the matter is resolved to the satisfaction of the public, we believe production in the local food manufacturing sector will continue to slow in the coming months.”

Five of the subindexes comprising the PMI showed signs of expansion, but all at a decelerating rate, with employment, new orders and production recording their weakest growth numbers since March.

After 10 consecutive months of expansion, the six-month outlook dropped 10.7 percentage points to 43.4 percent, the lowest since December 2013. Production materials prices also sank 10.2 percentage points to 36.4 percent, the worst result on record.

Among Taiwan’s six major industries, basic raw materials, chemicals and biotechnology, electronics and optical, as well as transportation equipment, continued expanding, while electrical and machinery equipment, food and textiles started contracting.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=223645&CtNode=413)