Taiwan’s manufacturing sector remains weak in May

Jul 24, 2023

The manufacturing sector remained weak in May, with the blue light indicator staying in place for the third month in a row amid uncertainty about the future of the economy in the United States and China, a think tank said Wednesday (July 5).

Taiwan uses a five-color system to symbolize economic performance, with blue standing for contraction, yellow-blue representing sluggishness, green indicating stable growth, yellow-red referring to a warming economy, and red pointing to an overheated or booming economy.

In its latest review, the Taiwan Institute of Economic Research (TIER) said that apart from the uncertainties surrounding developments in China and the U.S., weak global demand also caused Taiwan’s exports to lose impetus. Exports, export orders, and production all fell by 10% from May last year, the TIER report said.

Nevertheless, a minority of sectors, including information technology, bucked the trend and showed signs of recovery, per CNA. The limited improvement caused the overall manufacturing index to rise 0.7 points from April to reach 10.05 points in May, still not enough to leave the blue light behind.

Looking forward, TIER said demand from consumers in the U.S. and Europe was likely to remain weak amid inflation fears and interest rate hikes. The trend meant that export projections for Taiwan were unlikely to show a significant improvement in the immediate future, according to economists.

Source: Taiwan News