Taiwan’s manufacturing sector last month contracted for a third consecutive month, shrinking at its fastest pace since April last year, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The seasonally adjusted manufacturing purchasing managers’ index (PMI) fell to 47.9 from 48.0 in July, while the future outlook subindex further decreased 0.7 percentage points to 37.6, marking the fifth consecutive month of contraction, the institute said in a report.
The results signaled that sentiment across Taiwan’s manufacturing sector continued to worsen, as firms were still waiting for details on tariff negotiations with the US, the outcome of a US investigation under Section 232 of the Trade Expansion Act of 1962 and the situation in end-market demand, the institute said.
Photo: Ritchie B. Tongo, EPA
Among the five major components that make up the PMI, the new orders, production, employment and inventories subindices continued to fall, indicating firms’ lingering uncertainty over US tariffs and global demand, while supplier delivery time increased, it said.
Meanwhile, manufacturing activity contracted in five of the six major industries: transportation equipment, basic materials, food and textiles, electricity and machinery equipment, and electronics and optical devices, the institute said.
Only the chemical, biotech and medical industry expanded, it added.
The sharpest decline was in the transportation equipment industry, with new orders and production subindices plunging more than 10 percentage points, as the market anticipates potential tariffs and commodity tax cuts for the automotive sector, coupled with the end of promotion campaigns by car dealers, it said.
Firms in the six major industries all expressed greater pessimism for the next six months, the report said, which it attributed to uncertainties over the future of US trade policy and global demand.
By contrast, Taiwan’s non-manufacturing index (NMI) remained in expansion mode for the sixth month in a row, although it edged down 2.1 percentage points to 50.7, indicating a slowdown in growth momentum, a separate survey showed.
The decrease was mainly due to the sharp decline in business activity or new orders in industries such as construction, real estate, finance and insurance, retail, wholesale and tourism, the institute said.
Affected by the continued downturn in the manufacturing industry and uncertainty in the global economy, the six-month outlook for non-manufacturing sectors fell 1.7 percentage points to 38.9 last month, its sixth straight month of decline and the longest consecutive months of contraction for the outlook index since June 2023, the survey found.
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