Taiwan reports slower manufacturing activity growth in June

Taipei, July 2 (CNA) Taiwan's manufacturing sector continued to grow in June, but at a slower rate, due to the resurgence of geopolitical risks and shipping challenges, the Chung-Hua Institution for Economic Research (CIER) said Monday.

The purchasing managers' index (PMI) registered 53.7 percent in June, marking the second consecutive month of expansion, according to data compiled by CIER, one of Taiwan's leading economic think tanks.

However, the reading, a key measure of manufacturing economic trends, decreased by 1.7 percentage points from May's growth, which had marked the end of a period of contraction that started in May 2022.

PMI readings above 50 indicate expansion, while those below 50 represent contraction.

By industry, the sub-indexes for the chemical/biotech, electronics/optoelectronics, food/textile, basic raw material and electrical equipment/machinery industries continued expanding, the CIER report showed.

Meanwhile, the only sub-index that remained in contraction was the transportation equipment sector, partly due to the United States' crackdown on China's electric vehicle exports, which has affected procurement and inventory policies in the supply chain, CIER added.

The Future Outlooks Index also continued to grow, but growth decreased by 0.9 percentage points, down from the highest reading of 60.1 percent since April 2022.

The economic recovery remains on track despite a few setbacks, said CIER Acting President Wang Jiann-chyuan (王健全).

The manufacturing sector is moving in a positive direction, especially with a surge in orders for semiconductor, automation, and artificial intelligence (AI) applications, Wang said.

"AI is an opportunity given to us by heaven," he said, noting that if not for the U.S.-China trade war, it could be mainland China reaping the benefits.

However, some unfavorable conditions that slowed down growth remained, Wang noted, citing geopolitical uncertainties, high shipping costs, and a shortage of containers.