Taipei, Activity in both the manufacturing and service sectors in Taiwan was weaker in February, a reflection of the reduced number of working days in the month, when the six-day Lunar New Year holiday fell, the Chung-Hua Institution for Economic Research (CIER) said Friday.
The Purchasing Managers Index (PMI) for the manufacturing sector for February fell 8.6 from the previous month to 50.4, while the non-manufacturing index (NMI), which covers the service sector, also dropped 5.2 to 50.7.
CIER President Wu Chung-shu (???) said at a press conference that the decline in manufacturing and service activity resulted from seasonal effects caused by the long New Year holiday during the month.
But after seasonal adjustments, the February PMI and NMI fell slightly from a month earlier, Wu said. He did not provide details.
In addition, both the PMI and NMI pointed to expansion mode, indicating that the local economy has remained on the road to recovery.
In both the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.
Last month, the Directorate General of Budget, Accounting and Statistics (DGBAS) raised its forecast for Taiwan's gross domestic product in 2018 to 2.42 percent, up from an earlier estimate of 2.29 percent growth made in November, citing expected boosts in private consumption and investment.
Wu said the lower PMI in February came after the sub-indexes for new orders and production fell 16.8 and 24.2 percent, respectively, from a month earlier to 44.1 and 37.0 for the month. The declines of the two factors were the steepest among the five major factors of the PMI.
According to the CIER, the sub-indexes for employment and inventories also dropped 1.8 and 1.0, respectively, from a month earlier to 51.4 and 56.9, while the sub-index for supplier deliveries rose 0.9 to 62.5.
The sub-indexes for the six major industries in the local manufacturing sector -- chemicals/biotech, electronics/optoelectronics, transportation, electricity/machinery, food/textiles and infrastructure/raw material industries -- all moved lower in February, CIER said.
Wu said the weakness of the service activity in February largely resulted from a fall in the sub-indexes in business activity/production and new orders by 10.5 and 9.6, respectively, from a month earlier to 46.6 and 47.1 in February.
The sub-indexes for employment and suppliers' deliveries also dropped 0.6 and 0.1, respectively, from a month earlier to 54.5 and 54.4 in February, according to CIER data.
Source: Focus Taiwan News Channel