Taipei, Nov. 2 (CNA) Taiwan’s manufacturing activity remained in expansion in October, although growth momentum weakened as the index measuring activity in the sector fell from a month earlier with all five major subindexes, including new orders, production and employment, on the decline, the Chung-Hua Institution for Economic Research (CIER) said Monday.
Citing data, CIER, one of Taiwan’s leading economic think tanks, said the October purchasing managers’ index (PMI) in the manufacturing sector fell 0.9 points from a month earlier to 62.5. At the same time, the PMI remained in expansion for a 13th consecutive month.
The non-manufacturing index (NMI) for the service sector also fell 1.5 points from a month earlier to 55.4 in October but remained in expansion mode for a 20th consecutive month.
PMI and NMI readings above 50 indicate expansion, while those below 50 show contraction.
In October, the subindexes for new orders, production, employment, supplier deliveries and inventories all moved lower by 0.4, 0.9, 1.3, 0.2 and 1.4 points, respectively, from September to 63.2, 64.7, 56.3, 68.4 and 60.0 points, CIER said.
The subindex for new orders recorded its second consecutive monthly decline, CIER added.
However, the subindex for business outlook over the next six months moved higher by 0.3 points from September to 61.7 in October, marking the 10th consecutive month that the subindex has stayed above 60, CIER said.
CIER President Lien Hsien-ming (連賢明) told reporters that global AI development showed signs of moderating largely due to a lack of crucial components, particularly memory chips and substrates, which postponed deliveries.
In addition, Lien said the market has paid close attention to whether massive AI investments will generate adequate returns.
Although Taiwan’s October PMI fell from September that can be attributed to slowing momentum not an economic climate reversal, he noted.
Echoing Lien, CIER Vice President Chen Shin-Horng (陳信宏) said AI, like any other industry, has ups and downs.
Among the six major industries, only the electricity and electrical equipment and transportation equipment sectors saw increases in their subindexes, while those for chemical/biotech, electronics/optoelectronics, food/textile and basic raw material industries all moved lower. The six industries were all in expansion.
While domestic consumption stayed solid in the fourth quarter, boosting retail sales and tourism, momentum in the financial sector slowed amid volatility in global equity markets, weighing on the broader services sector in October, CIER said.
In October, three of the four major subindexes of the NMI — business activity, employment and supplier deliveries — fell 3.0, 2.3 and 0.7 points, respectively, from a month earlier to 54.7, 54.1 and 56.0, while only the subindex on new orders stayed unchanged, CIER added.
The subindex on business outlook over the next six months also fell 1.6 points from September to 56.2 in October but stayed in expansion for a 10th straight month.
(By Pan Tzu-yu and Frances Huang)
Enditem/AW