A local think tank says that a sharp decline in the non-manufacturing Index (NMI) is rather unusual. The think tank – Chung-Hua Institute for Economic Research (CIER) – commented on the decline in a report out Thursday.
The report shows that the NMI in June fell 4.3 percentage points to 50.5%. That’s the lowest level since August of last year.
CIER Director Wu Chung-shu said the dip is mostly due to a sharp drop in business activities and new orders.
Wu said Taiwan should stay on alert as the expansion which lasted for three months in a row has now turned into a contraction.
The report also said that the purchasing managers index (PMI) dropped to 50.8% in June, the slowest expansion since March. Of the five major indices, new orders, production level, and employment level all expanded, whereas inventories contracted. The speed of supplier deliveries also dropped.