PMI gains momentum: CIER – Taipei Times

MARKET ADJUSTMENT:
The new trade orders sub-index added 3.3 points as demand increased in all sectors except basic materials suppliers, according to the monthly survey.

  • By Crystal Hsu / Journalist

The official Manufacturing Purchasing Managers (PMI) index edged up last month to 58.3 as operating conditions improved, but component shortages and port congestion limited growth, the Chung-Hua Institution for Economic Research (CIER,) said yesterday.

The latest reading, which is only 0.5 points higher than September, ended two consecutive months of slowdown and kept the reading in the expansion zone for the 16th consecutive month, with all sectors recording increases in activity, according to the data.

“In particular, chemical and biotech manufacturers, as well as those who produce food and textiles, saw a rebound, after a modest contraction a month earlier,” said CIER chairman Chang Chuang-chang (張 傳 章) at a press conference in Taipei.

Photo: Wu Chia-ying, Taipei Times

The PMI aims to measure the health of the manufacturing sector, with readings above 50 indicating expansion and lower scores suggesting contraction.

The critical new trade orders sub-index added 3.3 points to 56.8 as demand picked up in all sectors except primary material suppliers, according to the monthly survey.

Companies have expressed concern over mounting inflationary pressures as suppliers of materials and components consider passing on cost increases driven in part by persistent supply disruptions and port congestion in the United States, Chang said.

The commodity price sub-index rose 3 points to 80.9, while the delivery time reading remained high at 65.7, although it slowed from 69.1.

The situation has increased cash burdens on middle and downstream players, who have difficulty delivering products to customers and therefore cannot settle accounts, Chang said.

The measure on export orders fell 4.6 points to 50.6, indicating that some international customers have overbooked and had to slow their pace of inventory building, said executive director of Supply Management Institute of Taiwan (中華 採購 與 供應 管理 協會), Steve Lai (賴樹鑫). , adding that such adjustments were good for the industry.

The six-month outlook sub-index was 54.2, down 1.3 points from the previous month, but all sectors have positive views, he said.

An energy crisis poses the biggest puzzle and could get worse, Lai said.

The non-manufacturing index rose 1.2 points to 58.5, rising for the fourth month, as businesses dependent on domestic demand emerged from the shadow of a COVID-19 outbreak earlier this year .

The improvement has been most obvious for restaurants, hotels and real estate companies, he said.

The landscape looks bright for service providers, helped by a vibrant economy and government-backed stimulus bills, he said.

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