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 12^th 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.