Chart of the Week: Taiwan manufacturing business surveys
Head of Macro Analysis
Summary: In the past few days, we got a bunch of data related to global trade that confirm global growth may surprise to the downside as a direct consequence of China’s slowdown and trade war.
In the chart below, we have plotted Taiwan’s manufacturing business surveys released by Taiwan National Development Council. Manufacturing PMI, new orders and manufacturing production have all contracted in May and based on preliminary data, contraction is expected to continue in June. What is happening in Asian export-oriented countries, that serves as proxy of global trade, tend to corroborate the need for fiscal and monetary stimulus in order to offset the negative trend that will weight on growth in coming quarters.