Taipei, July 3 (CNA) Taiwan’s manufacturing sector continued to grow rapidly in May, even as the country faced an outbreak of locally transmitted COVID-19 cases, according to the Taiwan Economic Research Institute (TIER ).
TIER, one of Taiwan’s leading think tanks, said many export-oriented manufacturers continue to benefit from the global economic recovery as many major economies reopen, boosting demand.
Data compiled by the think tank showed that the composite index of the local manufacturing sector, which measures the health of the sector, fell slightly from 0.82 from the previous month to 17.71, falling into the fire category. “yellow-red” which goes from 16 to 18.5.
The fall in the composite index largely reflects sporadic infections at some tech companies, but output across the industry is unaffected, TIER said.
Despite the index’s slight drop, the manufacturing sector appeared in rapid growth mode in May, compared to the steady growth seen a month earlier, the data said.
TIER uses a five-color coding system to describe economic activity, with red indicating overheating, yellow-red indicating rapid growth, green representing stable growth, yellow-blue indicating slow growth, and blue reflecting a contraction.
From January to March, the manufacturing sector received two red-yellow lights and one green light. May’s red-yellow light even beat January 17.08 and March 17.25.
In addition to staggered working hours or other measures implemented by many manufacturers, TIER said, the industry continues to ride the wave of a booming global home economy, with strong demand for gadgets. emerging technologies used in distance work and online learning. .
TIER said the government’s imposition of a Level 3 alert to restrict movement of people had more impact on the local service sector than on the manufacturing sector, due to declining private consumption.
Of the five factors in the May index, only the commodity purchasing sub-index rose 1.41 from the previous month, while the other four – general business climate, demand, prices and costs – fell 1.48, 0.70, 0.03 and 0.03 respectively, TIER said.
Citing a poll, TIER said nearly 40 percent of those polled remain optimistic about their business prospects over the next six months.
In May, a surge in international crude oil prices boosted the textile industry which turned on another yellow-red light, while the paper industry felt the pinch from rising raw material prices, flashing a light yellow-red, against a red light in April, says TIER.
The rubber and plastics industry lit a yellow-red light in May, reversing a red light in April, as a stronger Taiwan dollar affected the orders they received, while the industry machinery continued to light a red light on the back of strong production and exports, TIER added.
TIER said that due to the relatively high base of comparison and sporadic infections among several exporters, the electronic components industry lit a yellow-red light in May, reversing a red light in April.