BUSINESS Taiwans manufacturing activity expansion slows in October Central News Agency 2013-11-02 01:12 PM Taipei, Nov. 2 (CNA) The pace of growth in Taiwans manufacturing activity showed signs of slowing as the purchasing managers index (PMI) posted a fall for the month of October, according to a local economic think tank. In a report released Friday, the Chung-Hua Institution for Economic Research (CIER) said Taiwans PMI for October fell to 51.6 from 52.6 recorded in September. It was the first month for the index to decline after it remained unchanged for the previous three months. A PMI reading of above 50 shows an expansion in manufacturing activity. Although the index still stood above 50, CIER President Wu Chung-shu said the fall in the October PMI indicated that the momentum of the local economic recovery has weakened, despite factory activity remaining on the course of expansion. Wu said the latest PMI index was disappointing as the figure was the lowest in eight months. The economist said the fall in the October PMI largely resulted from a slowdown in the electronics and optical equipment sector, which showed a contraction. The PMI in the sector fell to 47.2 from 54.2 recorded a month earlier. The sector is one of the six major sectors in the CIER research report. Steve Lai, executive director of the Center for Purchasing and Supply Studies, said he had previously expected that local manufacturers in the Apple Inc. supply chain would benefit from the launch of the U.S. consumer electronics giants two new iPhones. But, it turned out that shipments of certain Taiwanese companies, which assemble the Apple new gadgets, scored lower-than-expected growth in the month, Lai said. Lai said a major Taiwanese smartphone brand HTC Corp., which competes with Apple, also witnessed its sales slowing so far this year, and the weakness has become one of the main factors that have caused Taiwans export orders to slow. While the electronics and optical equipment sector suffered a decline in the PMI in October, the CIER said, the other five major sectors showed continued expansion in their factory activity. The think tank said in particular, the transport equipment sector and the chemical/biochemical sector reported the highest PMI reading of 60. Among the sub-indexes in the CIERs PMI, new orders, production, employment and supplier deliveries showed expansion with a reading of 51.2, 52.7 and 52.5, and 51.9, respectively. However, the inventories, customers inventories sub-indexes showed a contraction of 49.7 and 43.6, according to the think tank. Wu said he was particularly worried about the customers inventories sub-index, which has fallen to the lowest level since the CIER launched the PMI in July 2012. Wu added that the decline showed many buyers were reluctant to build up their inventories amid market uncertainty. (By Lin Hui-chun and Frances Huang)
Posted on: Sat, 02 Nov 2013 09:01:19 +0000
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