Taiwan's manufacturing activity contracted for the third consecutive month in July, according to the latest purchasing managers' index (PMI) reading released by the Chung-Hua Institution for Economic Research (CIER).

The manufacturing PMI for July stood at 48, down 0.1 points from the previous month. A PMI reading above 50 suggests expansion while below 50 indicates contraction.

Among the five sub-indexes, those for new orders and inventory levels continued to show contraction, while those for production and employment pointed to expansion, according to CIER.

The non-manufacturing index rose by 2.9 points from June to 54.9 in July. Business activity, new orders and employment continued to expand, while the sub-reading for suppliers' delivery time increased, the CIER said.