Taiwan's manufacturing index drops again

Taiwan's manufacturing industry reported sluggish figures in October, echoing the damp situation of the island's general economy.

The purchasing managers index (PMI), a key indicator for manufacturing, dropped month on month, for a fourth consecutive month, by 0.1 points from September to 46 in October, according to a monthly report from the Chung-Hua Institution for Economic Research, a local think tank.

It also remained below the 50 mark for a fourth straight month, the report said.

A PMI reading above 50 shows expansion in manufacturing activity, while a figure below 50 signals contraction.

All five indicators for the PMI -- new orders, production, inventories, employment and supplier deliveries -- showed a contraction.

Among six industrial sectors, only the sector of chemical, biochemical and medical rose above 50 to 54.1 points in October from 48.4 the previous month. The rest contracted.

Taiwan's GDP in the third quarter shrank by 1.01 percent year on year, the first reduction since the fourth quarter of 2009, when the island was affected by the global financial crisis.

Its authorities announced a package of short-term stimulus policies last week, including subsidies for the purchase of energy-efficient home appliances, for travel and for residents who replace their outdated cell phones with smartphones.

Wu Chung-shu, president of the Chung-Hua Institution, suggested that the island should work out long-term policies to cope with the challenges causing economic slowdown, such as the aging labor force and declining fiscal revenue. Endi