Taiwan: Manufacturing PMI falls in July but continues to point to improving conditions
The S&P Global Taiwan Manufacturing Purchasing Managers’ Index (PMI) dipped to 52.9 in July from June’s recent high of 53.2. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in manufacturing-sector operating conditions compared to the previous month.
July saw ongoing—albeit softer—gains in production and new orders, which have been supported by improved sales demand from both domestic and international markets, including Asia, Europe, and North America. Employment saw a marginal rise as firms focused on enhancing productivity. However, delivery delays worsened, leading to a reduction in input inventories despite marked growth in purchasing activity. The report also highlights a significant increase in backlogs of work, the highest since March 2022, indicating mounting capacity constraints.
In July, cost inflation reached its highest level in over two years, driven by a broad-based increase in material prices, including metals like copper and steel. This led to a rise in output price inflation to a two-year high, as firms attempted to protect their margins. Finally, the degree of optimism dipped to its lowest level for the year so far.