Taiwan's manufacturing sector flashes 'green light' in May
Taiwan's manufacturing sector flashes 'green light' in May2018/06/30 14:35:02
CNA file photo
Taipei, June 30 (CNA) The local manufacturing sector showed signs of improving by flashing a "green light" on an index, pointing to stable growth in May as the global economy continued to recover and boost demand, according to the Taiwan Institute of Economic Research (TIER).
TIER, one of the leading think tanks in Taiwan, said an increase in new technology applications and rising raw material prices served as a driver to the growth of the local manufacturing sector.
The composite index for the sector rose 0.29 points from a month earlier to 13.05, helping it return to the range of 13-16 points for a green light, up from a "yellow-blue" light in April, TIER said.
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.
Fang Chun-teh (æ¹ä¿å¾·), an economist with the think tank, told the press that while the May composite index was at the lower end of the green light range, the index still moved higher in recent months, indicating the local manufacturing sector was expanding at a stable pace.
According to TIER, three of the five factors that make up the composite index for the manufacturing sector moved higher in May. The think tank said the sub-indexes for pricing, purchases of raw materials and demand rose 0.70, 0.37 and 0.27, respectively, from April.
However, the sub-indexes for the general business climate and production costs moved lower by 0.75 and 0.30 from a month earlier in May, TIER said.
Citing a survey, the think tank said about 9.25 percent of the respondents in the local manufacturing sector said their business flashed a blue light in May, down from 17.31 percent in a similar poll in April.
In addition, 40.97 percent of the respondents said their operations flashed a yellow-blue light in May, up from 30.49 percent in April, while 42.85 percent said their business flashed a green light, down from 44.37 percent a month earlier, the survey found.
TIER said the local semiconductor industry continued to flash a green light as integrated circuits and electronics component exports recorded double digit growth in exports in May, when new technology applications and international brands' launches of new gadgets stimulated global demand.
In the month, the chemical raw material industry also flashed a green light on the back of rising product prices due to higher international crude oil prices, while the base metal industry flashed a yellow-blue light in the wake of rising price competition in steel items from China and South Korea, and amid fears over global trade protectionism, TIER said.
The auto/auto part industry, meanwhile, flashed a blue light as local car brands faced strong competition from imported cars in the month, which capped sales of locally-made cars, TIER said.
(By Pan Tzu-yu and Frances Huang)