TAIPEI (Taiwan News) — Taiwan’s manufacturing sector expanded for a 10th consecutive month in July, reflecting strong export demand and robust activity in the electronics industry.
The manufacturing Purchasing Managers’ Index rose 0.8 percentage points from June to 61.5, its fastest pace of expansion since September 2021, UDN and CTEE reported. The PMI is a widely used indicator of economic health and business conditions based on monthly surveys of purchasing managers, according to Pocket Securities.
It tracks changes in areas such as new orders, output, employment, and inventories. A reading above 50 signals expansion, while one below 50 indicates contraction.
New orders and output in the manufacturing sector increased in July, with growth concentrated in the electronics and optical industries. The PMI remained above the 50-point threshold, while new orders, output, inventories, and backlogged orders all posted increases.
Chung-Hua Institution for Economic Research President Lien Hsien-ming (連賢明) said Taiwan’s exports have remained resilient, with first-half exports reaching a record NT$13.53 trillion (US$416.6 billion). He added that the government’s recent upward revision of second-quarter economic growth also reflects continued momentum in the manufacturing sector.
Manufacturers remained optimistic about business conditions over the next six months, particularly in the electronics industry. However, CIER said producers continue to face supply constraints, higher material costs, and longer delivery times, all of which are limiting production capacity.
The institute added that strong global appetite for AI and semiconductor-related products, combined with ongoing geopolitical uncertainty in the Middle East, has tightened supplies of key materials. Suppliers with limited capacity are increasingly prioritizing higher-margin orders, customers willing to accept higher prices, and long-term business partners.
Meanwhile, Taiwan’s Non-Manufacturing Index, which measures activity in the service sector, fell to 57.3 in July from 59.9 the previous month. Lien attributed the decline to a pullback in Taiwan’s stock market after it reached record highs in June. He said some service-sector managers have become more cautious, concerned that weaker market performance could weigh on consumer confidence and household spending.