Manufacturing continues upward growth in June
By John Liu, The China Post
July 3, 2014, 12:05 am TWN
TAIPEI, Taiwan -- Taiwan's Purchasing Manager Index (PMI) registered at 58.2 in June, indicating great expansion in the manufacturing sector, according to a report released by the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday.
PMI measures manufacturing expansion. Any score above 50 points represents expansion and any score below indicates contraction.
All five sub-indices that make up the PMI showed expansion in June. The new order index was pegged at 59.6, the production index at 61.7, the employment index at 56.8, the supplier deliveries index at 57.4 and inventories index at 55.3.
According to CIER's report, all major manufacturing industries demonstrated expansion in June, and in order of expansion scale, the chemical, biological and medical industry's PMI registered at 61.1, the electronics and optics industry at 60.9, the transportation equipment industry at 60.7, the foods and textiles industry at 56.2, the electrical and machinery equipment industry at 56, and the basic raw materials industry at 51.2.
The Electronics Industry as the Main Growth Driver
The output of the electronics and optics industry accounts for roughly 40 percent of Taiwan's PMI, said CIER assistant research fellow Chen Shin-hui (陳馨蕙), adding that the industry was the main driver for growth in June.
The PMI of the chemical, biological and medical industry saw the largest surge in June. This was contributed by higher oil prices, the CIER said. The transportation equipment industry also performed well, due to increased new car sales in the month, according to CIER scholars.
Businesses in general are upbeat about the future. The “six-month outlook index” registered at 68.4 in June, which was a new record, the CIER said, adding that the figure had reached 60 or above for six consecutive months.
Looking into the future, the greatest uncertainty lies in China's demand and growth momentum down the road, research fellow Chen added.
US Leading the Growth
Taiwan's PMI score of 58.2 was comparatively better than that of most other nations. According to CIER's latest data, the U.S.' PMI was pegged at 55.4, Europe at 51.9, China at 50.8, Japan at 51.1, South Korea at 49.5, Singapore at 50.8 and Hong Kong at 49.1.
According to Steve Lai (賴樹鑫), the executive director of Supply Management Institute in Taiwan, the American manufacturing sector has performed well in the first half of 2014, and has allowed the nation to continue leading economic growth in the world.
Among manufacturing highlights in the U.S., production capacity is expected to grow 4.8 percent in 2014, and capital expenditures are expected to grow 10.3 percent, indicating companies' willingness to ante up on investments, Lai said. In addition, employment in the manufacturing sector is expected to grow 1.5 percent in the remainder of 2014, and revenues are forecast to grow 5.3 percent in the year.