TIER's manufacturing index show growth despite index setback

Leading think tank Taiwan Institute of Economic Research (TIER) issued its monthly manufacturing composite indicators for July this week, signaling a decline through its index gauging the sector's climate, though it showed a continued rapid growth phase.

TIER's composite manufacturing index declined 1.16 points to 16.52 in July, a small decline from June's score of 17.68. The index remained in the "yellow-red" light range between 16 and 18.5, signaling continual growth in the sector. The institution warned that the new stage in the pandemic could eventually hinder the global economic recovery, as established cases continue to rise worldwide rapidly.

Taiwan's exports in July 2021 increased by 34.66% compared with the same month in 2020, which marked a consecutive five-month in double-digit growth. July's performance is a result of the strong market demand for ICT parts and components and other merchandise, in addition to a much lower base effect due to the COVID-19 impacts.

Taiwan's exports and imports from January 1st till the end of July in 2021 gave a trade surplus of US$ 37.74 billion or increased by 38.32% y-o-y.

Taiwan's consumer price index (CPI) also increased by 1.95% in July 2021 compared with the same month of the previous year since the low base effect has waned. However, the core inflation rate excluding energy and food prices increased by 1.29% in July 2021.

TIER has pointed out that the wholesale price index (WPI) increased by 11.77% in July 2021 on a year-on-year basis, marking a four consecutive month growth in the double-digits.