The indicator for the manufacturing sector in Taiwan continued to flash a “green light,” indicating stable growth in November, due to strong exports and robust export orders, the Taiwan Institute of Economic Research (TIER) said Thursday.
Although the rapid spread of the Omicron variant of the coronavirus and a global surge in COVID-19 cases has dealt a blow to supply chains, slowing economic recovery, the export-oriented Taiwanese manufacturing sector continued to pick up in the month, according to TIER, one of the nation’s leading think tanks.
Taiwan’s exports, export orders and industrial production all posted double-digit growth in November thanks to the rapid development of emerging technologies for digital transformation, according to TIER.
Data compiled by TIER showed the composite index for the local manufacturing sector rose 0.14 in November from a revised 15.14 a month earlier to 15.28, flashing a green light for the second consecutive month.
According to TIER, the index flashed a green light three times this year, in February, October and November.
November’s green light was also stronger than February (14.25), indicating the steady recovery of the manufacturing sector, TIER said.
The think tank uses a five-color coded 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.
Looking ahead, TIER said attention should be paid to whether the decision of the U.S. Federal Reserve to dial back bond buying next year and possible 0.75 percentage point interest rate hikes by the end of 2022 prompts other countries to follow suit. There are concerns such a move could trigger a financial crisis in some emerging economies already troubled by high public debt which would act as a drag on global economic growth.
In addition, there are worries the worsening of the epidemic situation in Xi’an, China, an important production base for DRAM, automobiles, high-end equipment, new materials and new energy manufacturing, could trigger a new supply chain crisis.
Xi’an has tightened lockdown measures after recently reporting one of the worst community COVID-19 outbreaks in China since the initial wave of coronavirus infections in Wuhan, the original epicenter of the pandemic, at the beginning of last year.
Source: Focus Taiwan News Channel