Taipei: The local manufacturing sector reported sluggish growth for the second consecutive month in October, as export orders and industrial production growth showed signs of moderating, the Taiwan Institute of Economic Research (TIER) said Monday.

According to Focus Taiwan, TIER’s composite index, which measures the sector’s overall health, fell 1.03 points from September to 10.56-still at the lower end of the “yellow-blue” range of 10.5 to 13, signaling sluggishness. TIER uses a five-color system to assess activity: “red” for overheating, “yellow-red” for fast growth, “green” for stable growth, “yellow-blue” for sluggish growth, and “blue” for contraction.

Among the composite index’s five components, raw-material purchases fell the most in October, dropping 0.50 points, followed by demand, which slipped 0.41 points. Business climate and cost subindexes dipped 0.14 and 0.04 points, while the pricing subindex edged up 0.06 points.

Sentiment in traditional industries was generally weak, while electronics and machinery manufacturers remained cautious about the next six months. In October, 57.25 percent of surveyed manufacturers reported contraction, up from 54.11 percent in September, and 15.40 percent described conditions as sluggish, compared with 14.01 percent a month earlier. Meanwhile, 24.02 percent said activity was stable, more than double September’s 10.40 percent, and 3.32 percent reported “yellow-red,” or warming conditions.

By industry, the electronic components sector flashed a stable green light in October, down from an overheating red in September, as U.S.-bound export growth turned negative and export-order momentum weakened across the U.S., Europe, Japan, and ASEAN. In the traditional sector, base metals remained in contraction amid depressed global steel prices, while the chemical industry also stayed in the blue due to falling demand and intensifying competition, TIER said.