Taiwan's manufacturing activity expands strongly in August

09/01/2020 06:06 PM
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Taipei, Sept. 1 (CNA) Taiwan's manufacturing activity expanded rapidly in August as export orders continued to pick up as the COVID-19 crisis appeared to be abating, the Chung-Hua Institution for Economic Research (CIER) reported Tuesday.

The seasonally adjusted manufacturing purchasing managers' index (PMI) registered 56 in August, an increase of 1.9 points from the previous month, marking an expansion in the manufacturing sector for the second consecutive month and the sector's fastest rate of expansion since January this year, according to the CIER, one of Taiwan's leading economic think tanks.

The non-manufacturing index (NMI) for Taiwan's service sector, meanwhile, also rose in August by 2.1 points from a month earlier to 59.4, the strongest expansion since the data started to be compiled in August 2014, according to the CIER.

For the PMI and NMI, readings above 50 indicate expansion or growth, while those below that threshold represent contraction.

Among the five major factors in the PMI, the sub-indexes for new orders and production both registered growth for the second consecutive month in August, with the one for new orders rising by 5.8 points to 62.5, marking the first time the sub-index had moved above 60 this year.

In terms of the business outlook over the next six months, the sub-index rose 4.2 from a month earlier to 53.5 in August, marking the first time the sub-index had indicated an expansion after six months of contraction.

CIER economist Chen Hsin-hui (陳馨蕙) said that the PMI and NMI both continued their upward trend in August after they moved up in July for the first time since Taiwan reported its first confirmed COVID-19 case in January, showing that the impact of COVID-19 on businesses across all sectors has significantly reduced.

Asked whether Taiwan's economy has recovered from the COVID-19 pandemic, CIER President Chang Chuang-chang (張傳章) said that the economy bottomed out in the second quarter and is now showing moderate growth.

However, it is still too early to suggest that Taiwan is undergoing a fairly robust recovery from COVID-19, Chang said, noting that the development of the pandemic and information on when a vaccine against the virus can be developed will be the focus of attention when gauging the growth prospects of businesses.

(By Pan Tzu-yu and Evelyn Kao)

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