Taipei, Taiwan's manufacturing sector flashed a "yellow-blue" light in April, signaling sluggishness, but that was an improvement from a "blue light" a month earlier, according to the Taiwan Institute of Economic Research (TIER).
The improvement came as Taiwan's exports grew at a double-digit pace in April because of a growing global economy and higher raw material prices, TIER said.
TIER, one of Taiwan's leading think tanks, said the composite index for the manufacturing sector rose 1.25 from a month earlier to 11.70 to enter the yellow-blue light category, which ranges from 10.5 to 13 points.
That ended two straight months of a blue reading.
TIER uses a five-color light system to describe economic activity, with red indicating overheating, yellow-red showing fast growth, green representing stable growth, yellow-blue signaling sluggish growth and blue reflecting a contraction.
According to TIER, three of the five factors that make up the composite index for the manufacturing sector moved higher in April. The sub-indexes for the general business climate, pricing and demand all rose from a month earlier in April.
The growth in the three factors echoed Taiwan's strong export performance in April, when the country's outbound sales rose 10 percent from a year earlier to US$26.73 billion.
Bucking the upturn, however, the sub-indexes for purchases of raw materials and production costs were down from a month earlier in April, TIER said.
In April, about 29.04 percent of the sectors covered by the TIER survey flashed a blue light, down from 61.11 percent in a similar survey in March, while 47.06 percent flashed a yellow-blue light, up from 29.78 percent a month earlier.
Another 22.12 percent of the polled sectors flashed a green light in April, up from 8.54 percent in March, TIER said.
Benefiting from an increase in international crude oil prices and product prices, the chemical raw material and product industry continued to flash a green light in April, but the rubber industry flashed a yellow-blue light as downstream manufacturers adjusted their inventories, TIER said.
The electronics component sector continued to flash a yellow-blue light in April as global demand for smartphones and mining devices used in cryptocurrency transactions weakened, limiting component shipments during the month, the think tank said.
TIER said the base metal industry flashed a yellow-blue light as demand was on the decline as the United States threatened China with additional tariffs on its metal products.
The textile industry was boosted by rising demand for functional textile products and improved from a blue light to a yellow-blue light in April, while the auto/auto component sector flashed a blue light because of a month-on-month 12.2 percent decline in car sales during the month, TIER said.
Source: Focus Taiwan News Channel