Manufacturing sector in March sees 2nd-fastest growth this year

04/29/2021 03:34 PM
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CNA file photo
CNA file photo

Taipei, April 29 (CNA) Taiwan's manufacturing industry grew again in March, with an index gauging the health of the sector flashing a yellow-red light, indicating fast growth, for the second time this year, the Taiwan Institute of Economic Research (TIER) said Thursday.

The manufacturing sector received a boost in March as the impact of the COVID-19 pandemic on the global economy had gradually tapered off and the number of work days returned to normal in the month after fewer work days in February due to the week-long Lunar New Year holiday, according to the TIER, one of Taiwan's leading think tanks.

The industry also benefited from a booming stock market, TIER added.

Data compiled by TIER showed that the composite index for the local manufacturing sector in March rose from 14.0 a month earlier to 17.08, the second yellow-red light, after the index in January flashed the first yellow-red light since September 2010.

TIER attributed the fast growth in March to the blossoming of the stay-at-home economy, an increase in demand for technology devices for online learning and remote work amid COVID-19, the think tank said.

Meanwhile, a low base of comparison and record monthly highs of exports, imports, export orders and the industrial production index in March all contributed to the growth, according to TIER.

The composite index for the local manufacturing sector fell from 17.08 a month earlier to 14.25 in February, according to the data.

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 contraction.

The composite index for January and March were both at 17.08, the highest since June 2020.

The high index for January was mainly due to a low base of comparison, as the Lunar New Year holiday fell in January last year, meaning that there were fewer work days, while the March index indicated brisk growth in the manufacturing sector as the global economy showed signs of recovery from last year's COVID-19 pandemic, which boosted demand for end-user demand.

Looking ahead, TIER said that the International Monetary Fund and the Organization for Economic Cooperation and Development both marked up their forecasts for 2021 global economic growth, which is expected to give a boost to the manufacturing sector.

However, with Taiwan's close economic links with the world, there are still uncertain factors that could affect its economy and manufacturing activity, including the extension of lockdown measures in some countries amid COVID-19 resurgence and trade and technology conflicts between the United States and China.

(By Su Szu-yun and Evelyn Kao)

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