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Manufacturing, service sectors thriving: think tank

2018/02/01 23:19:05

Taipei, Feb. 1 (CNA) The momentum of the local manufacturing and service sectors continued to accelerate in January, with the indexes gauging activity in the two sectors moving higher on the back of improving economic fundamentals at home and abroad.

The Chung-Hua Institution for Economic Research (CIER) said Thursday that the Purchasing Managers Index (PMI) for the manufacturing sector for January rose 1.0 from the previous month to 59.0. It was the 23rd consecutive month in which the PMI remained above 50, which indicates steady growth, the leading Taiwanese economic think tank said.

It was the longest stretch of expansion in the local manufacturing sector since the CIER started releasing the PMI data in July 2012, the think tank said.

Meantime, the non-manufacturing index (NMI), which covers the service sector, also rose 2.6 from a month earlier to 55.9 in January, marking expansion for the 11th consecutive month, the think tank added.

In both the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.

The latest PMI and NMI figures came after the Directorate General of Budget, Accounting and Statistics (DGBAS) reported the previous day that Taiwan's economy grew 3.28 percent year-on-year in the fourth quarter of last year, beating a DGBAS forecast in November of 2.3 percent growth, largely on robust export performance.

In 2017, Taiwan's economy grew 2.84 percent from 2016, compared with an earlier estimate of a 2.58 percent increase, according to the DGBAS.

CIER President Wu Chung-shu (吳中書) said at a press conference that the higher PMI and NMI indexes show that the pace of the local economic recovery remained stable, with many firms appearing more upbeat about their business outlook over the next six months.

Among the five major factors in the January PMI, three of the sub-indexes -- for new orders, suppliers' deliveries and inventories -- moved higher from a month earlier, up 2.8, 1.2 and 3.2, respectively, to 60.9, 61.6 and 57.9, the CIER said. However, the sub-indexes for production and employment each fell 1.1 from a month earlier to 61.2 and 53.2, respectively, the CIER added.

Of the six industries that make up the manufacturing sector in the CIER model, the sub-indexes for chemicals/biotech, electronics/optoelectronics, transportation, and electricity/machinery moved higher, the think tank said.

However, the sub-indexes for the food/textiles and infrastructure/raw material industries moved lower in January, the think tank added.

In terms of the January NMI, all of the sub-indexes for the major four factors -- business activity/production, new orders, employment and suppliers' deliveries -- rose by 3.0, 2.6, 1.7 and 2.9, respectively, from a month earlier to 57.1, 56.7, 55.1 and 54.5, according to the CIER.

(By Tsai Yi-chu and Frances Huang)