The manufacturing index shows slow growth due to a weak global economy. | So Good News
Taipei Oct. 31 (CNA) Taiwan’s export-oriented manufacturing sector continued to show slow growth in September amid a sharp slowdown in the global economy, the Taiwan Institute of Economic Research (TIER) said Monday.
A composite index measuring the fundamentals of the manufacturing sector fell 0.62 points from a month earlier to 10.53 in September, flashing a “yellow-blue” light for the seventh straight month, signaling continued weakness in domestic manufacturing. Compiled by TIER, one of the leading economic think tanks in Taiwan.
September’s score was the lowest since May 2020, just 0.03 points higher than the blue light category’s 10.5 points.
The advisory said red indicates overheating; Yellow red is fast growing; Green represents steady growth; A five-tier system is used to evaluate the economy within the sector, with yellow and blue signaling slow growth and blue.
The index covers five areas: demand; selling price production costs; It attempts to measure the health of a manufacturing operation by looking at raw material costs and the operating environment.
interest rate hikes by central banks in the US and Europe aimed at fighting inflation; The Russia-Ukraine standoff and China’s COVID-19 policy have many implications for the economic recovery, TIER said. Slower than expected.
Earlier this month, the International Monetary Fund forecast global growth to slow from 6.0 percent in 2021 to 3.2 percent in 2022, and cut its 2023 global GDP growth forecast to 2.7 percent, down 0.2 points from its July estimate.
While the global economy has slowed, Taiwan’s industrial production and exports have grown for 26 consecutive years and 31 months, respectively. Also, export orders from Taiwanese companies fell more than 3 percent year-on-year in September, the third decline this year. According to TIER, this has adversely affected the demand and supply of raw materials for production in the manufacturing sector and procurement of raw materials.
In addition, large interest rate hikes in the US and Europe; Weak global stock markets and reduced stock adjustments in the electronics industry led manufacturers to downgrade their future prospects, dragging down the composite index for the domestic manufacturing sector, TIER said.
TIER is American; Major economic activity such as Europe and China should be watched to see if the US economy can sustain growth after the central bank raises interest rates. political developments in China; The impact of US trade controls on chip exports to China on China’s economic development.
Most of Taiwan’s manufacturing companies are based in China. TIER noted that the future development of the Chinese economy will have a direct impact on Taiwanese manufacturers and will be closely monitored.