Taiwan Jan PMI rebounds to 51.7 as new orders hit 4-month high

[TAIPEI] Data from the HSBC Taiwan Purchasing Managers' Index showed Taiwan's rebounding to 51.7 from 50.0 in December.

Readings above 50.0 signal an improvement in business conditions while readings below indicate deterioration.

Total new business placed at Taiwanese manufacturers increased at a solid pace in January, offsetting a slight reduction in December. This was highlighted by a further increase in new export orders in January, with the rate of growth picking up to a four-month high.

The latest survey data signaled an increased amount of new export business in January following a fractional fall in December. After adjusting for seasonal factors, the rate of expansion was moderate overall, albeit slightly weaker than the long-run series average.

Panelists generally cited China, Europe and the US as key drivers of new export growth in the latest survey period.

Commenting on the Taiwan PMI survey, John Zhu, Economist at HSBC in Asia, said: "Taiwan's manufacturing sector rebounded in January with output and new orders both returning to growth after falling in December. The sharp reduction in inventories and rise in backlogs of work also suggest growth momentum will pick up in the months ahead. With employment also growing strongly, we believe there should be little pressure for Taiwan's central bank to loosen policy."

REUTERS