Manufacturing activity shows signs of expansion over July
August 2, 2014, 12:04 am TWN
TAIPEI -- Manufacturing activity in Taiwan shows signs of expansion, according to the latest data released by the Chung-Hua Institution for Economic Research (CIER,中華經濟研究院) Friday that points to an increase in the purchasing managers index (PMI).
According to CIER, one of Taiwan's leading economic think tanks, the local PMI for July rose 0.3 points from a month earlier to 58.5 on the back of an expansion in new orders, production and employment, indicating that the local manufacturing sector has been growing steadily.
A PMI reading of above 50 indicates expansion in manufacturing activity, while a figure below 50 signals contraction.
Among the six factors in the local PMI, the sub-index for new orders rose to 62.3 points, up 2.7 from a month earlier. CIER said the increase in this category shows that local exporters still enjoyed a booming season with increasing orders.
The think tank said the production sub-index rose to 62.2 points in July, up from June's 61.7. July was the fifth consecutive month for the production factor to stay above the 60-point mark.
CIER said the employment sub-index for July rose 2.4 points from June to 59.2, the second-highest since the think tank launched the PMI in July 2012, adding that demand for labor remained strong in the local manufacturing sector.
While the sub-index for supplier deliveries fell to 54.2 points in July from 57.4 points recorded in June, it was the 11th consecutive month for the sub-index to stay above the 50 mark, the think tank said.
Meanwhile, the sub-index for inventories fell to 54.5 points in July from June's 55.3, but the sub-index stayed above the 50 mark for seven months in a row, the think tank added.
The local PMI covers six major industries in Taiwan. Except for the raw material sector, which showed signs of contracting at 48.9, five others showed expansion, CIER said.
The sub-index for the biotech industry stood at 55.7 points in July, while the electronics and optoelectronics industry stood at 63.9, the machinery sector registered 60.5 points, the transportation industry showed 60.0 points and the food and textile industry recorded 52.9 points.