Taipei--Activity in the manufacturing sector expanded for the 14th consecutive month in April as the economy at home and abroad continues to recover and boosts demand, the Chung-Hua Institution for Economic Research (CIER) said Tuesday.
The strong manufacturing sector also fueled the expansion of the the country's service sector for a second consecutive month in April, according to the CIER, one of Taiwan's leading economic think tanks.
While the manufacturing sector's purchasing managers index (PMI) for April fell 4.2 points from a month earlier to 61, the figure still signaled that the sector was expanding, the CIER said.
At the same time, the non-manufacturing index (NMI) for the service sector rose 1.2 points in April from a month earlier to 56.3, CIER data showed.
PMI and NMI readings above 50 indicate expansion, while a reading below 50 represents a contraction.
CIER President Wu Chung-shu (???) said recent economic data shows Taiwan's economy is recovering, giving a strong boost to the manufacturing sector, and manufacturing momentum has in turn gradually spread to the service sector.
The CIER is one of three local think tanks to revise its forecast for Taiwan's gross domestic product (GDP) growth in 2017 to above 2 percent.
The think said in April Taiwan's GDP is expected to grow 2.11 percent this year, an upgrade of 0.38 percentage points from an earlier estimate, because of an improving outlook for exports.
Among the PMI's five major criteria, only the sub-index for supplier deliveries rose from a month earlier in April, while the other four fell, but all the five sub-indexes remained above 50, CIER said.
Last month, the sub-index for supplier deliveries rose 0.8 points to 59.7, while the sub-indexes for new orders, production, employment and inventories fell 10.1, 7.6, 3.4 and 0.4, respectively, to 62.20, 65.2, 60.0 and 58.1, CIER data showed.
Among the six industries making up the manufacturing sector in the CIER model, the sub-indexes for electronics/optoelectronics, chemicals/biotech, infrastructure/raw materials, electricity/machinery and food/textiles moved lower in April, the think tank said.
Only the sub-index for the transportation equipment sector trended higher.
As for the NMI, three of the index's four major criteria trended higher. The sub-index for business activity/production was up 2.0 points at 58.4, the sub-index for new orders was up 1.5 at 59.0 and the sub-index for employment was up 2.6 at 53.1.
But the sub-index for supplier deliveries fell 1.6 to 54.6.
Wu said that with economic fundamentals showing strength, domestic enterprises were likely to increase their investment, particularly in capital goods, to boost capacity.
The economist urged the government to improve Taiwan's investment environment to make it easier for the private sector to expand.
Source: Focus Taiwan News Channel