Taiwan’s official manufacturing purchasing managers’ index (PMI) last month climbed to a new high of 65.1 as business heated up across sectors, but soaring shipping and raw material prices threaten to erode corporate profitability, the Chunghua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“Local firms generally reported strong orders, but continued to complain about container shortages, which are delaying shipments,” CIER researcher Chen Shin-hui (陳馨蕙) said on behalf of the research team.
Meanwhile, raw material price hikes are adding to operational costs, she said.
Photo: CNA
PMI data aim to measure the health of the manufacturing industry, with values larger than 50 indicating business expansion and those lower than that threshold suggesting contraction.
The sub-index on new business orders was 68.2, comfortably above the expansion mark, although slowing from 69.4 one month earlier, the Taipei-based institute said.
Bike buyers are having to wait for more than a year for delivery, while order visibility is clear through December for semiconductors, CIER vice president Wang Jiann-chyuan (王健全) said.
Raw material and shipping costs also rose to historical highs, which could squeeze profits for companies that depend on providing intermediate goods, Chen said.
The sub-index on raw material prices last month rose 3 points to 85.8, with local firms mulling whether to pass cost burdens to customers to protect their bottom line, she said.
The reading on delivery times added 8.2 points to 73.3 as companies reported difficulty securing containers to ship products, she added.
A local company had to lease a ship for three years to ensure the smooth delivery of goods, and tackle container shortages and weekly shipping charge hikes, said Steve Lai (賴樹鑫), executive director at Supply Management Institute in Taiwan (中華採購與供應管理協會).
“The case sheds light on how serious the container shortage is,” Lai said, urging firms to strengthen communications and abandon the practice of overbooking, which is pushing up operating costs and augmenting supply constraints.
A major chip testing and packaging company has raised selling prices by 30 percent to discourage reckless orders, as customers would rather risk double-booking than experience inventory shortages.
Fears of supply chain disruptions caused by recurring lockdowns amid the COVID-19 pandemic have prompted companies to raise supply security levels.
The non-manufacturing index (NMI) was 55, staying in the growth zone for the eighth consecutive month, CIER said.
Chen said the NMI might see corrections this month after some hotels and restaurants reported cancelations of bookings following a COVID-19 cluster infection at Taoyuan General Hospital last month.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last