Uncertainty surrounding the Middle East conflict and rising prices for high-tech components have jointly triggered a wave of advance inventory stockpiling among manufacturers, propelling Taiwan’s manufacturing Purchasing Managers’ Index (PMI) to new heights. Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), pointed out that the seasonally adjusted PMI for April reached 60.3, marking its fastest pace of expansion in nearly 55 months, dating back to September 2021.
President Lien stated that geopolitical conflicts in the Middle East have prolonged delivery times and driven up price quotes for petrochemical products, prompting manufacturers to pull in orders early. Coupled with capacity reallocations and persistent price hikes in artificial intelligence, semiconductors, and electronic components, the seasonally adjusted PMI rebounded by 4.9 points to 60.3 from the previous month. This marks the first time the index has crossed the critical 60 threshold in four years and seven months.
The PMI utilizes a baseline of 50 to separate expansion from contraction. Taiwan’s PMI has now remained in expansionary territory for seven consecutive months, with the manufacturing sector’s six-month outlook also continuing to point toward growth.
President Lien attributed the sharp rebound in April’s seasonally adjusted manufacturing PMI to three primary factors. First, the ongoing Middle East conflict has caused raw material prices to climb, increasing manufacturers’ need for inventory buffers and early procurement. Second, Taiwan’s economic performance in the first quarter was exceptionally strong, with exports exceeding $80 billion, driven heavily by the stellar performance of the electronics sector. Third, the electronics sector has generated significant positive spillover effects, lifting the operational performance of other industries.
Among the five sub-indices comprising April’s PMI, seasonally adjusted new orders and employment continued to expand, while production flipped into expansion. This was primarily driven by lengthening supplier delivery times and a continued expansion in inventories. Meanwhile, the unadjusted PMIs for all six major manufacturing industries expanded in April. Ranked by the pace of expansion, the electronics and optical industry led at 67.5, followed by chemicals, biotechnology, and medical care (61.0); basic raw materials (57.9); transportation equipment (57.5); electrical and machinery equipment (57.3); and food and textiles (55.8).
Hsin-Hui Chen, Associate Research Fellow of the Taiwanese Economy Research Division at the CIER, also noted that while new orders declined in March, they rebounded sharply in April. Beyond the standout performances in electronics, opticals, and electrical machinery, the IC design sector also demonstrated robust strength. With these indices all reflecting an expansionary pace, visibility for high-end manufacturing orders is exceptionally clear, with momentum expected to remain strong well into the second half of the year.
The production index rebounded by 9.1 points to 57.4. Anticipating that the geopolitical conflicts would persist through April, manufacturers moved to stockpile early just as client orders surged. Chen added that even inventories—which manufacturers had previously sought to minimize—saw a rush of inflows, pushing the inventory index to 60.4 in April, its fastest pace of expansion since May 2022.
Source: Commercial Times (May 5, 2026). Taiwan’s PMI Surges Past 60: Macro Data Reveals Strong Manufacturing Recovery Signal. Commercial Times. https://www.ctee.com.tw/news/20260505700037-439901