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Taiwan's PMI Declines to 51.5 in October Due to Tainted Cooking Oil Scandal

2014/11/11 | By Judy Li

Taiwan's Purchasing Managers' Index (PMI) decreased 1.8 points from a month earlier to 51.5 points in October, a new low since December 2012, according to Chung-Hua Institute for Economic Research (CIER), which C. S. Wu, its president, attributes to mainly the slow global economic recovery and turmoil due to the seemingly endless tainted cooking oil scandal on the island.

The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and employment environment. CIER indicates that inventory levels showed downtrend in reversal, with the remaining four factors on slow uptrends.

In the same month Taiwan's six major industries had mixed performance, and of which, transport vehicles, electrics & optics, chemical & bio-medicals, and raw materials kept expanding, with  food & textile, electro-mechanical  experiencing contraction.

A 50-plus PMI represents expansion of manufacturing and vice versa, while a reading of 50 indicates no change.

Wu notes, if excluding seasonal adjustment, Taiwan's PMI of manufacturing stood a little above 50 in October to show weak expansion. Taiwan's tainted cooking oil problem will not likely end till early 2015 to further sap consumer confidence, which may severely undermine plans to hold traditional year-end company parties and spring parties, as well as deter traffic to restaurants and food stands at night markets that attract not only local but also international customers. (JL)