Turvo International Co employees work on the auto-parts maker’s production lines in Taichung on Sept. 18.

The manufacturing industry’s business climate monitor stayed “green” in August, suggesting steady growth, as local tech firms benefited from inventory demand ahead of new product launches by global technology brands, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.

It is the fifth straight “green” signal, even though manufacturers overseas remained weighed by a slowdown, the Taipei-based think tank said.

The composite index compiled by the TIER increased 0.29 points from the previous month to 14.1, as the readings on demand and selling prices weakened, but the scores on the operating environment, inputs and production costs climbed modestly, it said.

The mixed results came as local electronics suppliers gained business traction ahead of the releases of a new iPhone series and Apple watches last month, it said.

Taiwanese firms are responsible for making the new iPhones’ camera lenses, chips and other components, the TIER said, adding that the advent of the Christmas season also ramps up business for electronics used in notebook computers, e-readers and peripheral gadgets.

The institute’s data showed the input score added 0.8 points, and both the operating environment and production costs inched up 0.13 points, while demand and selling price lost 0.13 points and 0.65 points respectively.

Business sentiment fell in the first half of August due to concerns about a potential hard landing in the US economy, but the unease subdued after the US job market proved resilient, a relief for tech exporters, the institute said.

By sector, the business monitor flashed the second boom signal for local manufacturers of electronic components, as evidenced by record-high export orders and outbound shipments, as well as strong industrial production, the TIER said.

The recovery extended to other sectors, although in an uneven manner.

Machinery equipment makers reported a business uptick, thanks to demand from semiconductor firms, but base metal suppliers struggled with listless demand and price competition from abroad, it said.

Domestic makers of textile products came out of the woods on the back of the high sales season and the local currency’s depreciation, reversing a hit linked to China’s termination of favorable trade terms, the institute said.

Food and beverage suppliers received seasonal support over the summer vacation and Ghost Month, which fell mostly in August this year, it said.

Ghost Month is believed to be the main reason for a 17 percent decline in new vehicle sales, it added.

However, local makers of auto parts emerged from a business retreat, helped by restocking demand from automakers in the North America market, the institute said.


Taipei Time / Crystal Hsu