Taiwan’s manufacturing activity continued to expand in May, but the non-manufacturing sector turned to contraction, as domestic demand fell due to the COVID-19 outbreak, the Chung-Hua Institution for Economic Research (CIER) said Tuesday.<\/p>\n\n\n\n
The Purchasing Managers’ Index (PMI) fell 2.7 points in May from a month earlier to 66, due to concerns over soaring prices and shortages of raw material, power and water supplies amid the COVID-19 pandemic, but it remained above 60 for the seventh consecutive month, according to CIER.<\/p>\n\n\n\n
The PMI was 68.7 in April, the highest since the think tank started to release such statistics in July 2012, its data showed.<\/p>\n\n\n\n
In the service sector, the non-manufacturing index (NMI) dropped 10.9 in May from a month earlier to 49.2, snapping an 11-month expansion streak, as domestic demand dropped amid Taiwan’s worse COVID-19 outbreak and its implementation of a nationwide Level 3 alert for the disease, according to CIER.<\/p>\n\n\n\n
For the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.<\/p>\n\n\n\n
CIER President Chang Chuang-chang (\u5f35\u50b3\u7ae0) said the decline in the PMI in May can be attributed mainly to obviously modest expansion in three of the five factors — new orders, industrial production and employment.<\/p>\n\n\n\n
Although the sub-indexes on new orders and industrial production both showed expansion in May for the 11th straight month, the figures fell 3.9 and 5.1 points, respectively, from a month earlier to 67.7 and 65.8, according to the data.<\/p>\n\n\n\n
The employment sub-index dropped 4.2 in May from a month earlier to 59.6.<\/p>\n\n\n\n
The sub-index on supplier deliveries in May remained unchanged at 74.8, while that on inventories dipped 0.1 from a month earlier to 62.2, according to CIER data.<\/p>\n\n\n\n
However, the sub-index on the business outlook for the manufacturing sector over the next six months plunged 12 points in May from a month earlier to 67, ending a four-month streak of strong expansion in which it remained above 70, Chang said.<\/p>\n\n\n\n
Meanwhile, the non-manufacturing sector went from expansion to contraction in May, due to the COVID-19 outbreak, as retail and other business operations slowed down and new orders declined, he said.<\/p>\n\n\n\n
The sub-indexes on business activities and new orders for the sector fell 20.7 and 19.8, respectively, to 42.8 and 45.0 in May, according to the CIER.<\/p>\n\n\n\n
The sub-index for the business outlook for the non-manufacturing sector over the next six months plunged 30.1 to 37.7, after hitting a record high of 67.8 in April, according to the data.<\/p>\n\n\n\n