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Taiwan’s manufacturing sector slows in April when pandemic hits orders
Kathrin Hille in Taipei
Taiwan’s manufacturing sector slowed sharply in April, as the blow that the coronavirus pandemic is causing to the global economy is causing a drop in demand for its exports.
Two purchasing managers’ indices (PMI) released on Monday turned negative, reflecting record declines in production and new orders from manufacturing companies last month.
The IHS PMI Markit Taiwan Manufacturing fell from 50.4 in March to 42.2 in April, its lowest level since May 2009, when the economy was reeling from the global financial crisis.
The PMI compiled by the Chunghua Institution for Economic Research (CIER), the Taiwan government’s group of macroeconomic experts, fell from 53.1 in March to 47.6 in April, the fastest drop since the institute began the index in 2012.
A PMI reading below 50 points to a contraction.
The negative readings highlight the risks to Taiwan’s economy despite the fact that its successful containment of the pandemic has left its domestic economy less affected than those of countries with blockades. Gross domestic product expanded 1.54 percent compared to the same period last year, according to the government’s initial reading published last week.
“Production and new orders fell at the fastest rates since the depths of the global financial crisis in January 2009, and many companies noted that blockages in major export markets in Europe and the US weighed heavily on the performance, “said Annabel Fiddes, associate director of IHS Markit.
“The virus, which has caused the massive closure of companies and travel restrictions in several nations, also meant that supply chains were under increased pressure, and the latest survey points to the most pronounced increase in delivery times since that started the survey in 2004. “
According to the CIER PMI, only the chemical, pharmaceutical and electronics industries continued to grow last month. The transport machinery industry and the electrical machinery and tool sectors showed the biggest drop.
According to the institute’s services PMI, also released on Monday, the services sector remained in contraction.
