A PMI above 50 indicates expansion, while below reflects contraction. The service sector PMI dropped 0.9 points to 49.9 in October, the first time it has been below the boom-bust line since March 2017, according to the Chung-Hua Institution for Economic Research (CIER).
Specifically, the sub-index for new orders in the manufacturing sector dropped a substantial 4 points to 51.2 last month, while the sub-index for the raw material inventory ended a 30-month streak of expansion, registering at 50.
Meanwhile, the island's business outlook in manufacturing seemed gloomy. The CIER index, which monitors the manufacturing business outlook for the next six months, dived 7 points to 40.6 in October, the steepest drop in three years and the second consecutive month showing a below-50 figure.
CIER analyst Jiann-Chyuan Wang attributed the falling PMI to a wait-and-see attitude among manufacturers, given uncertainty from external environments and a worldwide fall in raw material prices.