The Chung-Hua Institution for Economic Research (CIER) published data on October 1 showing that the manufacturing Purchasing Managers’ Index (PMI) for September was 48.3%. This represents a slight increase of 0.4 percentage points from the previous month. However, the index has remained below the 50% threshold—which separates expansion from contraction—for 4 consecutive months, indicating continued economic contraction.
Shin-Horng Chen, the Vice President of the CIER, stated that the data reflects ongoing AI application demand driving certain industries. Nevertheless, overall sentiment remains affected by U.S. reciprocal tariffs and international uncertainties. Manufacturers maintain a conservative outlook, with tariff impacts estimated to gradually materialize earliest in the 1st quarter of next year.
Non-Manufacturing Sector Shows Stable Expansion § AI Support Creates Industry Divergence
By industry sector, the transportation equipment industry (41.1%) and the food and textile industry (41.3%) remain at their lowest points. The electronics and optical industry (48.8%), while supported by AI themes, has not yet escaped contraction. The electrical and machinery equipment industry (50.8%) returned to expansion due to recovering U.S. demand for electrical equipment, though this does not signal a comprehensive recovery in machine tools. Shin-Hui Chen, Associate Research Fellow at the Third Research Division of the CIER, noted that industries related to AI and data centers—including chips, servers, and heavy electrical equipment—have shown outstanding performance. In contrast, traditional industries such as petrochemicals, automobiles, and machine tools face greater pressure.
In the non-manufacturing sector, the September Non-Manufacturing Index (NMI) rose to 52.1%, up from 50.7% in August, marking continued expansion. The information, communications, and broadcasting industry (56.5%) and the financial and insurance industry (56.3%) showed the strongest performance, closely correlated with active stock market conditions. The accommodation, food service, and wholesale industries performed more weakly due to impacts from earthquakes, floods, and seasonal factors. Experts also noted that while universal cash distributions have boosted short-term consumption, their long-term multiplier effects have yet to be observed.
Vice President Shin-Horng Chen emphasized that September’s economic conditions present a divergent pattern of “manufacturing contraction and service expansion,” revealing Taiwan’s economy caught between external risks and domestic demand support. Looking ahead, businesses should continue to monitor international developments and policy changes, while seizing opportunities in AI and the energy transition, to enhance resilience and competitiveness.
Author: CIER Editorial Team
Date: October 2, 2025