News
July PMI falls to 47.8
By ECCT staff reporters
Taiwan’s official Manufacturing Purchasing Managers Index (PMI) fell into negative territory for the first time in two years in July. According to the monthly report by the Chung-Hua Institution for Economic Research (CIER), the July PMI reading came in at 47.8, down 5.8 points month-on-month as new orders and production contracted while manpower hiring and inventory expanded, and supplier delivery times decreased.
According to CIER, the new orders sub-index, which is a leading indicator of economic trends, has contracted for four consecutive months, plummeting 10.8 month-on-month to 36.6 in July, the fastest contraction since June 2020. The seasonally adjusted production index fell 7.8 points to 43.8. Among the six major industry sectors, the readings for four were now below the neutral 50 level, indicating contraction: the electronics and optics industry fell to 45.5, electric power and mechanical equipment dropped to 47.2, basic raw materials to 47.3, while the chemical biotechnology medical industry fell to 49.2. Only the transportation industry (55.5) and the food and textile industry (54.8) showed expansion.
The business outlook for the manufacturing industry for the next six months has been contracting for three consecutive months, with the sub-index falling by 7 to 30.1 in July, the largest contraction since May 2020.
The non-manufacturing index (NMI), which covers service sector activity, however, rose 7 points from a month earlier to 56.7 in July, according to CIER.
