Jun 02, 2017 Culture Comments Off on Manufacturing sector flashes 2nd straight ‘yellow-blue’ light
Taipei--The local manufacturing sector flashed a "yellow-blue" light for the second consecutive month in April, signaling a slowdown, with export orders and industrial production showing signs of moderating, the Taiwan Institute of Economic Research (TIER) said on Friday.
TIER, one of the leading economic think tanks in Taiwan, said that the slower growth in exports and industrial production reflected a relatively high comparison base with the second quarter of last year, although the global economy remained on the way to recovery.
In addition, the think tank said that a fall in raw material prices in the global market also affected the local manufacturing sector's performance in the month.
The composite index for the manufacturing sector for April fell from 10.91 points in March to 10.58 points, flashing a yellow-blue light, which represents a score from 10.5 to 13. In February, the index flashed a green light of 14.29 points, pointing to stable conditions.
TIER uses a five-color system to describe economic activity, with red indicating overheating, yellow-red showing fast growth, green representing stable growth, yellow-blue signaling sluggish growth and blue reflecting a contraction.
The April index came after national industrial production for April registered a slight year-on-year fall of 0.59 percent, reversing an eight-month gaining streak.
In addition, export orders received by Taiwanese firms in April rose 7.4 percent from a year earlier, but that was still a fall from the 12.3 percent year-on-year increase seen in March.
According to TIER, of the five sub-indexes in the composite index for April, the sub-index for demand fell 0.32 points, the sub-index for pricing dropped 0.26, and the sub-index for raw material investment declined 0.17 points.
However, the sub-index for business environment rose 0.30 points month-on-month in April, and the sub-index for operating costs gained 0.13 points, TIER said. Of the industries covered by a TIER survey, about 42.74 percent said their business flashed a blue light in April, up from 31.22 percent in a similar survey in March.
Fang Chun-teh (???), an economist with TIER, said uncertainty is expected to rise in the second half of this year and impact Taiwan's manufacturing sector for example through fluctuations in the prices for raw materials.
Fang said the pace international high-tech firms unveil new products will also be an important factor dictating the performance of many local manufacturers in the second half of the year as many Taiwanese firms are suppliers to multinational brands such as Apple Inc.
Source: Focus Taiwan News Channel
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