Taiwan Manufacturing Growth Maintains Momentum

The S&P Global Taiwan Manufacturing PMI edged down to 55.1 in July 2026 from 55.2 in the previous month, marking its weakest reading since March. However, it remained firmly in expansion territory for an eighth consecutive month, as output increased for the eighth straight month and remained above its long-run average. Moreover, new export orders expanded for a seventh month running, although the pace of growth softened slightly from the previous month. In the labor market, Taiwanese manufacturers returned to hiring for the first time since February, though employment growth was only marginal. On the price front, input cost inflation eased to its weakest level since January, while output charge inflation slowed to a five-month low, indicating a moderation in pricing pressures. Looking ahead, Taiwanese manufacturers remained optimistic about the outlook for production over the next 12 months, though still slipped to its lowest level since April.

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.