cens logo

Taiwan's PMI Hits 6-Month Low of 53.3 in September

2014/10/21 | By Judy Li

Taiwan's purchasing managers' index (PMI) dropped to 53.3 in September, down 2.1 points from a month earlier to the lowest level since March this year, according to the Chung-Hua Institution for Economic Research (CIER).

CIER president C. S. Wu notes that PMI, an indicator of the economic health of the manufacturing sector, is based on five major indicators: new orders, inventory levels, production, supplier deliveries, and employment environment. A PMI of more than 50 represents expansion of the manufacturing sector compared to the previous month, a reading under 50 represents a contraction, and a reading of precisely 50 indicates no change.

In September the indexes of five indicators was all above the “50” level, Wu says, with the employment environment at 55.3 for the 22nd consecutive monthly expansion, due mainly to strong demand in the service industry. In addition, Wu explains, the island's shopping spree for the iPhone 6 helped reinforce consumer power and enhance internal demand.

In the same month the PMI was also above 50 for all of Taiwan's six major industries, with the index for electronics and optical equipment at 55.5, for transportation vehicles at 54.8, for chemicals and biomedicine at 52.3, and for food and textiles at 51.3. The PMI for electrical and mechanical equipment fell to a 12-month low of 50.9, and basic raw materials was down to 50.5.

The business outlook for the next six months as forecast by manufacturing enterprises, Wu adds, showed a drop of 6.5 to 54.1 for September, the largest decline since April of 2013 and bringing eight consecutive months of expansion at levels above 60 to an end. (JL)