Taiwan PMI steady at 55.1 in July as new orders hit five‑year high
Output charge inflation cools to five-month low even as capacity strains persist.
Taiwan's manufacturing sector kept up a strong pace of growth in July, with new orders rising at one of the sharpest rates in five years and employers taking on staff for the first time in five months, according to the latest S&P Global survey.
The headline Taiwan Manufacturing Purchasing Managers' Index eased only slightly to 55.1 in July from 55.2 in June, pointing to another robust improvement in operating conditions.
Demand for Taiwanese goods rose sharply for a seventh consecutive month, with the pace of increase amongst the fastest seen in five years, even as growth in new export orders eased a touch. Firms pointed to generally strong underlying demand, though some noted clients placing bulk orders.
Production rose for an eighth straight month, extending the current run of expansion, though the pace was the softest since April, prompting some manufacturers to draw on finished stock as goods awaited shipment.
Purchasing activity increased substantially in July as firms restocked raw materials and intermediate goods, continuing a trend seen through much of 2026, whilst supplier delivery times lengthened further amidst shortages and logistics disruption. Backlogs of work also grew, capacity pressure that persisted albeit at the softest rate since January. Against that backdrop, employment rose for the first time since February, though only marginally, as firms sought extra capacity to keep pace with demand.
On prices, inflationary pressure continued to ease: input cost growth slowed to its weakest since January, whilst output charge inflation fell to a five-month low.
Joe Hayes, senior principal economist at S&P Global Market Intelligence, said Taiwan's manufacturing economy continued to boom even as the data pointed clearly to supply-side constraints, with new orders growing at one of the fastest rates in five years while production struggled to keep up. He said the limited rise in employment suggested firms would need to rely on productivity gains for additional capacity in the near term, and noted it was striking that output charge inflation had eased further given manufacturers' apparent pricing power, with some firms reporting orders placed in anticipation of price rises — a sign, he said, that clients recognised they were operating in a sellers' market.
Despite sentiment slipping to its lowest level since April, Taiwanese manufacturers remained optimistic about the year ahead, with growth expectations underpinned by bullish demand forecasts.
