Taiwan’s manufacturing sector grew in January for the 19th consecutive month, but the pace of expansion slowed, according to the latest Purchasing Managers’ Index (PMI) for Taiwan compiled by the Chung-Hua Institution for Economic Research (CIER).
Taiwan’s seasonally adjusted PMI, which measures the health of the manufacturing sector, fell 3.1 points in January from a month earlier to 56.2, the lowest since September 2020, the CIER, a leading Taiwanese think tank, said Tuesday.
Rising concerns over COVID-19 amid a new spread of domestically transmitted cases also led to a continued decline in January of the non-manufacturing index (NMI), which covers service sector activity.
The NMI fell 4.7 from a month earlier to 53.9, its lowest level since August 2021, according to the CIER.
For the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.
Though both the PMI and NMI fell, there were some positive signals from specific factors underlying the PMI, CIER President Chang Chuang-chang (???) said.
Chang said the PMI sub-index for the business outlook over the next six months rose by 1.8 points from a month earlier to 59.7 and remained above 50 for the 18th consecutive month, indicating that manufacturers remained optimistic about the future.
Chang attributed the fall in the overall PMI to drops in the sub-indexes for new orders and production.
Meanwhile, Kamhon Kan (???), an economist at Academia Sinica’s Institute of Economics, said the PMI figures have been moving in tandem with global economic trends.
As lockdown restrictions began to be gradually lifted last year, economic indicators and the PMI soared to new highs, Kan said.
But with the economy returning to normal in late 2021 and the emergence of uncertainty related to inflation and the Federal Reserve’s quantitative tightening, the PMI has begun to fluctuate, according to Kan.
In terms of the NMI, Chang said the index moved lower in January largely because of an increase in locally reported cases of the Omicron variant of COVID-19, which hurt the hospitality industry especially hard, according to Chang.
Though the sub-index for the general business outlook over the next six months continued to remain above 50 for the seventh consecutive month in January, it still plunged from 64.6 in December 2021 — the highest level since May 2021 — to 53.0 in January.
Source: Focus Taiwan News Channel