TAIPEI: The manufacturing sector continued to flash “blue” last month, indicating a contraction at a time when the local economy remains in the doldrums, the Taiwan Institute of Economic Research (TIER) said yesterday.
It was the eighth consecutive month in which the TIER-compiled composite index for the local manufacturing sector was “blue,” although the index showed signs of recovery.
Last month, the composite index of the local manufacturing sector stood at 10.35 points, which remained in the “blue” range of below 10.5 points, but last month’s figure was 0.22 points higher than October, the TIER said.
The institute uses a five-step system to describe economic activity, with “red” indicating overheating, “yellow-red” showing fast growth, “green” representing stable growth, “yellow-blue” signaling sluggish growth and “blue” indicating a contraction.
The TIER said that as international crude oil prices remained low amid falling international demand, Taiwan’s mineral product exports have fallen at a double-digit pace, while some petrochemical production lines have been closed for annual maintenance, affecting oil product sales accordingly.
The think tank said that the weakness of the international oil market has prompted many downstream petrochemical firms to put their purchasing plans on hold, hoping to take advantage of even lower oil prices, which has further impacted the local petrochemical industry.
PETROCHEMICAL SECTOR
The sub-composite index of the local petrochemical sector remained “blue,” the think tank added.
The sub-composite index for the local machinery sector continued “yellow-blue” last month since demand from China and the ASEAN market remained slow, the TIER said.
Last month, the sub-composite index for the local electronics component industry flashed “blue,” compared with “yellow-blue” a month earlier, due to continued inventory adjustments, the TIER said, adding that the year-end shopping season failed to turn the situation around.
The TIER said that the sub-composite index for the local computer, electronics and optoelectronics sector also fell last month to “blue” from the “yellow-blue” that was seen in October.
The sector remained weak amid lingering falling international demand.
The think tank said that the sub-composite index for the local automaker and auto parts sector maintained “yellow-blue” last month on the back of strong demand for auto parts from the US and Chinese markets.
