Taiwan’s manufacturing sector roared ahead last month, posting its most vigorous improvement in more than four years, as buoyant global demand for semiconductors and artificial intelligence (AI) applications fueled sharp gains in output and new orders, S&P Global said in a report yesterday.
The S&P Global Taiwan Manufacturing Purchasing Managers’ Index (PMI) climbed to 55.2 from 51.7 in January, extending the expansion streak to a third consecutive month.
The latest reading marked the most pronounced upturn since December 2021, signaling a broad-based improvement in operating conditions across the sector.
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“With demand for semiconductors and AI-related technology ramping up worldwide, the momentum is likely to support the sector’s business in the months ahead,” S&P Global Market Intelligence economics associate director Annabel Fiddes said in a statement.
The improvement was underpinned by a surge in new business, with total new orders increasing at the fastest pace since July 2021, supported by firmer demand at home and abroad, S&P Global said.
Export orders expanded at the quickest rate in just over four years, with manufacturers reporting stronger sales to Europe, Japan, China and the US, it said.
Robust orders prompted firms to ramp up production at the sharpest pace since the middle of 2021.
To cope with rising workloads, companies accelerated purchasing activity, which recorded its steepest increase since November 2021, it said.
Input inventories rose at the fastest rate in four years, while stocks of finished goods expanded at the quickest pace since May 2011, reflecting growing confidence that demand would be sustained in the near term, it said.
However, the rapid rebound in activity placed fresh strain on supply chains.
Supplier delivery times lengthened at a faster pace last month, as vendors struggled to keep up with stronger demand and were reported to hold insufficient inventories, S&P Global said.
Price pressures also intensified. Average input costs climbed at the sharpest pace since April 2022 amid widespread increases in raw material prices, it said.
Manufacturers passed on part of the burden to customers, raising selling prices for a fifth consecutive month at the fastest rate since the middle of 2022, it said.
Despite buoyant output and orders, hiring remained measured. Employment rose only modestly, although the increase was the strongest in nearly three-and-a-half years, it said.
As demand outpaced workforce growth, backlogs accumulated at the quickest rate since August 2021, it added.
Manufacturers grew more optimistic about the 12-month outlook, with sentiment reaching its highest level since May 2024, buoyed by expectations that global demand — particularly for semiconductors and AI-related technologies — would remain supportive, S&P Global said.
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