The Chung-Hua Institution for Economic Research (CIER) announced on March 13, 2026, that Taiwan’s Manufacturing Purchasing Managers’ Index (PMI) for February stood at 58.5. This marks a continued increase from the previous month and the fifth consecutive month in the expansionary zone above 50, recording the fastest pace of expansion in nearly four years since March 2022. The index for the six-month outlook also showed expansion for the third consecutive month, rising another 3.1 percentage points in February to 64.1—likewise the fastest growth since March 2022. The trends indicate that businesses remain optimistic about future economic conditions.
Electronics and AI Demands Drive Continued Momentum in Manufacturing
Shin-Hui Chen, an Associate Research Fellow at the Taiwan Institute of Economics Research of the CIER, pointed out that despite February 2026 having only 14 working days due to the Lunar New Year and 228 Peace Memorial Day holidays, the electronic and optical industries experienced a rare pre-holiday rush for goods, driving the overall manufacturing momentum. In addition to sustained robust demand for advanced semiconductor manufacturing, the memory and CPU markets also saw price hikes and tight supply. Industry players reported rush orders for notebooks and early inventory pulling by clients, with a synchronized increase in orders for related IC substrates and high-end laptops.
Hsien-Ming Lien, President of the CIER, stated that Taiwan’s export orders are currently concentrated in product segments with strong global demand. However, the actual impact of recent adjustments to U.S. tariff policies and geopolitical conflicts in the Middle East on manufacturer confidence remains to be seen in mid-to-late March. If the conflicts are short-lived, most enterprises will view them as controllable risks.
President Lien noted that following the recent U.S. Supreme Court ruling that deemed the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to levy tariffs unconstitutional, the U.S. has pivoted to alternative measures, including Section 122 tariffs of up to 15%. Concurrently, the U.S. continues to adjust its trade policies using tools such as Section 232 and Section 301 investigations. Overall, however, industries such as AI, semiconductors, and electronic optics maintain strong economic momentum due to high order visibility.
Tariffs and Geopolitics Remain Uncertain; Transportation Equipment Outlook Weakens
In terms of sector performance, the transportation equipment industry was the only one among the six major industries to report a contraction in its future outlook, with the index plunging 10.3 percentage points to 44.7. This decline primarily results from uncertainties regarding U.S. import auto tariff policies and weaker-than-expected deliveries during the peak season before the Lunar New Year, which have led to a significant decrease in new car registrations and sales.
Furthermore, the index for the basic raw materials industry rebounded by 7.7 percentage points in February to 53.3, marking its fastest growth since July 2022. Associate Research Fellow Chen also noted that due to geopolitical conflicts, market expectations for rising raw material prices, inflation, and logistics costs have elevated. Meanwhile, anticipation of future reconstruction demand has caused the sector’s six-month outlook index to end a 10-month streak of contraction, jumping to 59.8—the fastest expansion pace since April 2022.
Author: CIER Editorial Team
Date: March 16, 2026