Taiwan manufacturing sector remains sluggish for fifth month

Taiwan's purchasing managers index (PMI), a key indicator for manufacturing, dropped 0.9 points from the previous month to 45.1 in November, the fifth monthly reduction.

The index, updated on Tuesday by the Chung-Hua Institution for Economic Research, a local think tank, also remained below the 50 benchmark for the fifth month in a row.

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, food and textiles were the only sectors that showed signs of expansion with a reading of 52.8 points in November. The rest reported a contraction.

The non-manufacturing index (NMI), also issued by the institution, was reduced to 48.7 in November from 50.8 of the previous month.

Of the four indicators of NMI, business activity and new orders continued to show contraction while employment and supplier delivery showed expansion.

Wu Chung-shu, president of the institution, attributed the poor performance of manufacturing to the shrinking export and suggested that, due to the general economic slowdown, it will take the industry quite some time to recover.

Taiwan's gross domestic product (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 had been affected by the global financial crisis. Endi