Taiwan’s manufacturing sector continued to grow briskly in September because of the global economic recovery, but there were also signs of a potential slowdown, the Taiwan Institute of Economic Research (TIER) said Wednesday.
The composite index for the manufacturing sector compiled by the TIER fell by 0.21 points from a month earlier to 16.27 in September, but the score remained just inside the “yellow-red” light category ranging between 16 and 18.5.
The economic think tank attributed the September decline to a lack of raw materials worldwide and power rationing in China, which caused the suspension of production in several industrial provinces.
It was the fifth consecutive month, and the seventh month this year, in which the manufacturing sector flashed a yellow-red light, according to the TIER.
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.
Among the five factors in the composite index for September, only the sub-index for the general business climate moved higher, by 0.38 from a month earlier, while the sub-index on pricing remained unchanged, TIER said.
The three other sub-indexes covering demand, raw material purchases, and costs moved lower by 0.29, 0.29 and 0.01, respectively, from a month earlier in September, according to TIER data.
The declines in the three sub-indexes largely reflected lingering concerns over the COVID-19 pandemic, China’s power rationing, and a global raw material shortage, the TIER said.
Those signs of a moderate slowdown in growth were also reflected in a TIER survey of manufacturers. The number of companies surveyed that felt their businesses flashed a “red” or “yellow-red” light in September fell by about 10 percentage points.
Some 39.18 percent of respondents thought their businesses flashed a yellow-red light in September, down from 52.94 percent in August, while 20.56 percent of them said their businesses flashed a red light, up from 17.34 percent a month earlier.
Another 24.83 percent said their businesses flashed a green light in September, up from 14.69 percent in August, and 14.25 percent said their businesses flashed a yellow-blue light in September, up from 9.56 percent in August, the TIER said.
By industry, electronic component makers continued to flash a yellow-red light in September because of strong demand for emerging technologies, such as 5G applications and the Internet of Things, as well as international brands’ efforts to launch new consumer electronics products, the TIER said.
The machinery industry flashed a green light in September after showing a yellow-red light a month earlier as exports and production growth moderated but demand for automation equipment remained solid, the TIER said.
Source: Focus Taiwan News Channel