Weakness in Taiwan's IP to persist in September

Taiwan's exporters were not immune. Industrial production (IP) fell into a deeper contraction of 3% yoy in July after the drop of 1.2% yoy in June. The manufacturing PMI was down further from 47.1 to 46.1 in August, its lowest reading since September 2012. Output and new orders continued to decelerate. This is result of sharp slowdown in mainland China's industrial and construction sectors that weakened demand for capital goods and industrial supplies, says Societe Generale.

Across the Taiwan Strait, there was still no recovery in mainland China's economic data in August, adding further downward pressure to Taiwan's manufacturing sector. Even orders for electronic components may have increased thanks to the new iPhone, softness in other sectors is likely to have offset the improvement in electronics and depressed overall IP growth, added SocGen.