Key insights
- Taiwan's March manufacturing growth slowed, with the PMI falling to 53.3. While still expanding, output and new orders grew at a softer pace. Supply chain disruptions due to the Middle East conflict worsened, leading to higher input costs and output charges. Employment marginally declined. Despite this, manufacturers remain optimistic about AI-related demand, but are wary of the war's impact. Weaker growth and supply chain issues in Taiwan, a key semiconductor producer, could negatively impact US tech and inflation.
Investing.com -- Taiwan’s manufacturing sector expanded at a slower pace in March, as the S&P Global Taiwan Manufacturing Purchasing Managers’ Index fell to 53.3 from February’s four-year high of 55.2, according to data released Wednesday.
The index remained above the 50 mark that separates expansion from contraction for the fourth consecutive month, indicating continued growth in operating conditions despite the deceleration.
Manufacturing output and new orders both increased at softer rates compared to February, though growth remained solid by historical standards. Companies reported raising production in line with customer demand, particularly for semiconductors and AI-related technology.
New export business expanded at a weaker but solid rate, with panel members noting higher sales across Europe, Japan, mainland China and the US.
The conflict in the Middle East contributed to supply chain disruptions, causing supplier delivery times to deteriorate at the fastest pace since May 2022. Input costs rose at the second-steepest rate in nearly four years, with firms reporting higher prices for raw materials and oil.
Companies responded by raising output charges at the sharpest rate since June 2022.
Employment declined marginally for the first time in three months, as businesses reported not replacing voluntary leavers. Backlogs of work increased sharply, marking the second-quickest accumulation since early 2022.
Despite the challenges, manufacturers remained highly optimistic about the year-ahead outlook, with sentiment holding near February’s 21-month high. Growth forecasts were linked to expectations of stronger global demand for AI-related products, though some firms expressed concerns about the war’s impact on supply chains and prices.
Data were collected from March 12-23, 2026.
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