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Manufacturing sector sluggish, flashes yellow-blue in November

TAIPEI--The composite index of Taiwan's manufacturing sector continued to flash a yellow-blue indicator in November, signaling a slowdown of an already sluggish economic recovery, a local think tank said Monday.

It was the eighth consecutive month that the manufacturing sector showed signs of a slowdown, according to the composite index compiled by the Taiwan Institute of Economic Research (TIER).

TIER's manufacturing composite index for November rose by 0.8 points from the previous month to 11.99 on the back of a slightly improved industrial production index, export orders, and export and import figures. A yellow-blue light flashes when the index is between 10.5 points and 13 points.

Export orders in November grew 0.8 percent year-on-year to reach US$41.05 billion, marking the fifth consecutive monthly rise, according to official statistics.

But actual exports in the month showed a 4.7 percent dip from October to US$24.89 billion to stay around the same level in November of last year.

The manufacturing composite index flashed blue for sluggishness in February and March and green for stability in January.

The other two colors on TIER's five-level color scale are yellow-red, meaning mild overheating, and red, indicating overheating.

The composite indicator measures five aspects of the manufacturing industry: demand, cost, pricing power, business environment and raw material investments.

Raw material investments, pricing power and business environment sub-indexes were up 0.86 points, 0.15 points and 0.08 points, respectively, from October, while the demand and costs sub-indexes fell 0.18 points and 0.11 points, respectively.

In individual industrial segments, the textile and ready-to-wear garment businesses benefited from peak season effects, flashing yellow-red and green light, respectively.

The food sector continued to flash yellow-blue in November, which TIER attributed to food safety concerns as worries over adulterated edible oil hampered buying interest.

The sub-index for the petrochemical and rubber segment continued to flash blue on falling international crude oil prices resulting from weakening demand.

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