News
February PMI at 48.1, CPI up 3.08%
By ECCT staff writers, CIER, DGBAS
Taiwan’s official manufacturing purchasing managers’ index (PMI) came in at 48.1 in February, virtually unchanged from January’s level of 48. It was the 12th consecutive month that the reading was below the neutral level (50, indicating economic contraction ahead). However, according to a report from the Chung-Hua Institution for Economic Research (CIER), while as all sectors reported a decline in business mainly due to holiday disruptions during the Chinese New Year, the six-month business outlook subindex gained 7.8 points to reach 54, returning to growth for the first time in 21 months, which CIER said is a sign that inventory adjustments for tech firms are almost over. According to CIER, the supply chain of consumer electronics and semiconductor AI, as well as modules and packaging and testing, have all rebounded. Coupled with the opening of TSMC's Kumamoto plant and the supply surge brought about by AI and high-performance computing, the semiconductor supply chain's future outlook has risen sharply.
Meanwhile the non-manufacturing index (NMI) shed 1.2 points but remained in positive territory at 52.3 in February. According to CIER, this was because some sectors started to lose confidence as Taiwanese prefer to travel overseas and the number of inbound tourists is not growing fast enough. In particular, the sentiment of hotels and restaurants turned negative about their business prospects due to the arrival of the low season and a high comparison base from last year. However, financial institutions, property brokers and telecoms became optimistic, partly due to the recent stock market rally, according to CIER.
In inflation news, Taiwan’s official The Consumer Price Index in February increased by 3.08%, mainly because the Lunar New Year of 2024 fell in February while that of 2023 fell in January. According to an official report from the Directorate General of Budget Accounting and Statistics (DGBAS), the indices for services for nursery and nursing care, services for entertainment as well as transportation fees rose by 25.87%, 7.19% and 2.19%, respectively. Moreover, the indices for fruits, meats, personal effects, medical care services, food away from home as well as residential rents also rose 20.71%, 5.45%, 4.46%, 4.04%, 4.00% and 2.21%, respectively. However, the indices for vegetables, communication equipment as well as household durable equipment fell 8.65%, 2.50% and 0.54%, offsetting part of the increase. The core CPI increased 2.90%. For the first two months of 2024, the CPI increased 2.43% over the same period of the previous year. The indices for commodity and service moved up 2.22% and 2.62%, respectively. The core CPI increased 2.27%.
