CNA file photo

Taipei, Oct. 3 (CNA) Manufacturing activity in Taiwan has now expanded for the longest period ever in this decade because of solid demand in the global high-tech market, according to the Chung-Hua Institution for Economic Research (CIER).

Taiwan's purchasing managers index (PMI) for the manufacturing sector for September was 58.7, and while the latest figure was down 0.1 from a month earlier, it was still above the 50 mark, pointing to expansion, the CIER said Monday.

It was the 19th consecutive month in which Taiwan's PMI exceeded 50, the longest period of continued expansion since the economic think tank started to compile local manufacturing activity data in July 2012.

As for the service sector, the non-manufacturing index (NMI) for September fell 1.6 from a month earlier to 53.6 but remained in expansion mode for the seventh straight month, the economic think tank said.

In both the PMI and NMI, readings above 50 indicate expansion, while those below 50 represent contraction.

CIER President Wu Chung-shu (吳中書) said the continued expansion in local manufacturing activity in September largely reflected an improvement in the electronics/optoelectronics industry, in particular after Apple Inc. placed orders to Taiwanese suppliers to support its rollout of new iPhone models.

In Taiwan, suppliers to Apple account for about 40 percent of the combined market capitalization of the main board and the over-the-counter market.

Wu said it was worth watching whether the debut of the new iPhones will trigger a significant wave of replacement buying, which would lead to Apple continuing to place large orders with its Taiwanese suppliers.

Among the five factors in the September PMI, the sub-indexes for employment and inventories moved higher, up 0.2 and 3, respectively, from a month earlier to 57.8 and 54.2, while the sub-indexes for the other three factors moved lower, CIER said.

The September sub-indexes for new orders, production and supplier deliveries fell 2.8, 0.2 and 0.8, respectively, from a month earlier to 60.4, 60.7 and 60.1, the CIER said.

Among the six industries that make up the manufacturing sector in the CIER model, the sub-indexes for the electronics/optoelectronics, electricity/machinery and transportation sectors trended higher in September but the sub-indexes for the chemicals/biotech, infrastructure/raw materials and food/textile industries trended lower, CIER said.

Only the food/textile industry was in contraction mode, the CIER said.

In the NMI, the four major factors fell but still pointed to expansion in September, according to the think tank.

The sub-indexes for business activity/production, new orders, employment and supplier deliveries fell 3.9, 1.3, 0.3 and 1.0, respectively, from a month earlier to 53.1, 54.6, 53.1 and 53.4 in September. 

(By Tsai Yi-chu and Frances Huang)
Enditem/ls