Taiwan Manufacturing Growth Remains Strong

The S&P Global Taiwan Manufacturing PMI eased to 55.2 in June 2026 from 56.1 in May, still indicating strong expansion. Output rose at the fastest pace since July 2021, driven by surging new orders and stockpiling amid Middle East conflict-related supply disruptions and higher price expectations. New export orders grew at the second-strongest pace since January 2022, supported by demand from the US, Europe, and Japan. Purchasing activity increased, while finished goods stocks rose at the second-fastest pace since 2011. Supplier performance weakened further due to shipping disruptions, though slightly less severe than in May. Input costs rose at a slower but still sharp rate, leading to higher selling prices. Employment declined for a fourth month, while backlogs increased at one of the fastest rates since early 2022. Business confidence hit a near two-year high, supported by strong AI and semiconductor demand, though cost pressures and geopolitical risks weighed on sentiment.

The S&P Global Taiwan Manufacturing PMI rose to 56.1 in May 2026 from 55.3 in April, signaling the strongest expansion since August 2021. The increase was driven by the steepest rise in output since July 2021, supported by stronger demand and stockpiling efforts amid supply disruptions linked to the Middle East conflict. New orders expanded at a joint-fastest pace since July 2021, while export orders continued to rise on stronger demand from the US, Europe, Japan, and China. Purchasing activity increased at the second-fastest rate since November 2021, while supplier delivery times deteriorated the most since March 2022 due to shipping delays and material shortages. Backlogs of work rose sharply, though employment was broadly unchanged. Input cost inflation remained among the strongest on record, prompting firms to raise selling prices further. Meanwhile, business optimism climbed to a two-year high, supported by expectations of stronger demand from the electronics and AI sectors.

The S&P Global Taiwan Manufacturing PMI increased to 55.3 in April 2026 from 53.3 in March, marking the fifth consecutive month of expansion in the sector. The latest reading also marked the fastest growth in factory activity since December 2021, supported by a faster rise in output and new orders. Total new business increased at the second-sharpest pace since July 2021, while new export orders rose at the second-fastest pace since early 2022. Although output and sales continued to rise, firms recorded a further decline in staffing levels, with job losses remaining marginal. Supplier performance deteriorated further due to disruptions. On prices, input cost inflation accelerated to the fastest pace since the survey began 22 years ago amid supplier price hikes. As a result, selling prices rose more quickly as firms passed on higher costs to clients. Finally, sentiment weakened to a three-month low as firms remained cautious about their forecasts amid the Middle East conflict.