Taiwan manufacturing PMI sinks to 16-month low in April
Firms downbeat on outlook for first time in 18 months.
Taiwan's manufacturing sector weakened for the second consecutive month in April, according to the latest Purchasing Managers’ Index (PMI) data.
The S&P Global Taiwan Manufacturing PMI dropped to 47.8 in April, down from 49.8 in March. This marks the steepest decline since December 2023 and signals a moderate but accelerating contraction in the industry.
The downturn was driven by solid declines in both production and new business, ending a 12-month period of growth. Firms cited reduced demand from both domestic and international markets, particularly in Asia, Europe, and the United States. Some companies attributed the slowdown in new export orders—the sharpest drop in 14 months—to recent tariff measures by the US government.
In response to weaker demand, manufacturers reduced purchasing activity and cut inventory levels of both raw materials and finished goods. April marked the first drop in input buying in a year, whilst post-production stockpiles declined for the first time since October 2024. Although supply chains improved slightly due to lower input demand, the reduction in lead times was marginal.
Employment in the sector also slipped, though only slightly, as companies chose not to replace voluntary departures and remained cautious about hiring amidst low order volumes. With fewer new orders, manufacturers were able to clear backlogs at the fastest pace since December 2023.
On the pricing front, cost pressures eased. Input prices rose at their slowest rate in over a year, whilst output prices fell as manufacturers offered discounts to attract buyers. The rate of price reductions at the factory gate was the quickest since July 2023.
Looking ahead, business confidence weakened notably. For the first time in 18 months, manufacturers predicted a decline in output over the coming year. Pessimism about future performance reached its highest level since January 2023, fuelled by concerns over global trade conditions and the impact of US tariffs.
Economics Associate Director at S&P Global Market Intelligence Annabel Fiddes noted that unless global demand recovers, Taiwan’s export-driven manufacturing sector may continue to struggle.
