Financial and Technology News

Manufacturing demand was soft in September: TIER

 2016/11/14
The composite index for the manufacturing industry stood at “yellow-blue” in September, indicating a sluggish state for three consecutive months, as soft demand and pricing led to a slight downturn in the operating environment, the Taiwan Institute of Economic Research (TIER) said in a report yesterday.
Two typhoons also had an impact, even though semiconductor firms stepped up capital spending to maintain their technology leadership positions on the world stage, the report said.
The TIER monitor stood at 11.41 points in September, down 0.2 points from August’s 11.61, the report said.
The index seeks to measure the health of the manufacturing industry by looking at five factors: demand, selling prices, production costs, material costs and the operating environment. All but material costs registered negative movements in September, the report said.
Oversupply and increasing competition from emerging markets weighed on textile and furniture makers despite the advent of high season sales, the report said, adding that the lackluster property market is also affecting furniture makers.
The weak business climate extended to the electronics sector, the main driver of the nation’s exports, because the market is increasingly saturated, the report said.
That accounted for selling price declines in smartphones, laptops and their components and offset the advancement in capital spending by semiconductor firms, the report said.
Automakers and the auto parts industry remained stalled due to the business slowdown in the US and China, the report said.
Firms in those two sectors are conservative about their business outlooks after transportation tool exports fell 20 percent and export orders dropped by 10 percent in September.
Petrochemical and rubber industries fared better as international crude prices stabilized after oil exporting countries agreed to moderate supply, the report said.
The institute uses a five-color system to gauge manufacturing activity, with “red” indicating overheating, “yellow-red” showing fast growth, “green” suggesting stability, “yellow-blue” indicating a sluggish state and “blue” indicating recession.
Back