Taipei, April 1 (CNA) Taiwan’s manufacturing activity stayed in expansion mode for the second consecutive month in March as new orders, supplier deliveries and inventories showed signs of improving from a month earlier, the Chung-Hua Institution for Economic Research (CIER) said Tuesday.
Data compiled by CIER, one of the leading economic think tanks in Taiwan, showed the local March purchasing managers’ index (PMI), which gauges the fundamentals of the manufacturing sector, rose 0.2 from a month earlier to 54.2.
In the service sector, the non-manufacturing index (NMI) rose 4.6 from a month earlier to 53.8 in March, returning to expansion mode after contracting in February, the data indicated.
PMI and NMI readings above 50 indicate expansion, while those below 50 indicate contraction.
At a news conference, CIER President Lien Hsien-ming (連賢明) said an increase in manufacturing activity largely came as many buyers scrambled to place orders early in a bid to avoid the impact of the Trump administration’s tariffs.
Amid uncertainties created by tariff threats from the United States, Lien said, orders placed in March were largely short-term rush deals.
Among the five major factors in the March PMI, the sub-indexes for new orders, supplier deliveries and inventories moved higher by 2.4, 2.6 and 1.2, respectively, from a month earlier to 56.8, 53.4 and 53.9 with all in expansion.
Bucking the upturn, the sub-indexes on production and employment moved lower by 4.1 and 1.0, respectively, from a month earlier, to 55.8 and 51.0 in March but remained in expansion mode.
In addition, the sub-index on the business outlook over the next six months rose 4.8 from a month earlier to 59.1 and also continued to remain in expansion mode.
By industry, the sub-indexes on four out of the six major industries — the electronics and optoelectronics, food and textile, basic raw material, and transportation equipment industries — trended higher in March, while the sub-indexes for the chemical and biotech, and electricity and electric equipment industries saw their indexes trending lower.
The six industries were in expansion mode, according to the think tank.
Echoing Lien, CIER economist Chen Hsin-hui (陳馨蕙) said at the same news conference that it remains to be seen whether buyers will continue to place orders at a time of tariff concerns.
Meanwhile, economist Kamhon Kan (簡錦漢) from Academia Sinica said many manufacturers are downbeat about their business outlook amid escalating concerns over the White House’s reciprocal tariffs expected to be announced on April 2.
The think tank said all of the four major factors in the March NMI moved higher with the sub-indexes for business activity, new orders, employment and supplier deliveries moving higher by 7.1, 7.8, 2.3 and 1.2, respectively, from a month earlier to 52.5, 54.8, 53.2 and 54.6. All were in expansion mode.
Bucking the uptrend, the sub-index on the business outlook over the next six months fell 2.6 from a month earlier to a contraction of 48.8, the think tank said, indicating sentiment has turned cautious in the service sector amid a volatile stock market, escalating geopolitical unease and fears over electricity rate hikes in April.
On March 28, the Ministry of Economic Affairs announced it would freeze power rate hikes citing concerns over the economy and inflation.
Amid continued tariff concerns, global financial markets could continue to see volatility over the next few months, Lien said.
