Taiwan’s official manufacturing purchasing managers’ index (PMI) last month rose to 55.4, rebounding to expansion mode for the first time in 14 months, as firms rebuild inventory amid subdued uncertainty, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“The manufacturing industry reported business improvement in May, although uneven growth persisted,” CIER acting chairman Wang Jiann-chyuan (王健全) told a news conference in Taipei.
PMI data aim to gauge the health of the manufacturing industry, with values of 50 and higher suggesting expansion and scores lower than the neutral threshold suggesting a contraction.
Photo: CNA
It is the first expansion since May 2022 when Taiwanese manufacturers took a hit from a global slowdown induced by drastic inflation and monetary tightening.
The recovery came after the US and China put up decent economic showings with no new geopolitical tensions, Wang said.
That explained why the critical measures of new business orders and industrial output gained 13.7 and 10.9 points to 63.8 and 61 respectively, the monthly survey showed.
However, rush and short orders lingered, reflecting a conservative attitude among customers at home and abroad, Wang said.
Suppliers of electronics used in artificial intelligence products fared noticeably better than peers in other tech sectors, he said, adding that tech firms in general recover faster than non-tech companies, which remained weighed by weak demand and sharp competition.
The readings on inventory rose 2.1 points to 49.2, while customers’ inventory shed 1.8 points to 42.1, as they remained cautious, Wang said.
Sticky inflation in the US and the US Federal Reserve’s evasive stance on rate cuts lent support to that wariness, although firms grew more positive about their business prospects in the following months, the institute said.
The subindex on the six-month outlook rose 4.9 points to 60.1, its highest since April 2022, it said.
At the same time, the reading on raw material prices increased 2 points to 66.1, meaning that firms increasingly felt the pinch of price pressures.
The S&P Global Taiwan Manufacturing PMI, which was 50.9, arrived at a similar observation, finding that some manufacturers sought to protect their margin through a rise in output charges for the first time in five months.
The data on delivery time confirmed a recovery at 52.5, from 50.3 in April, as shipping container shortages and port congestions resurged due to conflict in the Red Sea, CIER said.
In related developments, nonmanufacturing companies also reported business improvements on the back of Mother’s Day celebrations, Wang said.
The nonmanufacturing index rose 0.1 points to 54.2, as service providers from almost all sectors registered positive cyclical movements, he said.
Nonmanufacturers reported positive views about their business, as evidenced by the six-month outlook, which rose 8.7 points to 63.6, the Taipei-based think tank said.
All sectors shared the optimism, thanks to the arrival of the high season for hospitality operators and TAIEX rallies that benefit financial service providers, it said.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
RSS