Taiwan's Manufacturing Sector Sees Second Month of Growth: A Look at March's Economic Performance

Expansion Continues Despite Global Uncertainties and Tariff Concerns

Taipei, April 1st, Taiwan's manufacturing sector demonstrated resilience, experiencing expansion for the second consecutive month in March. The Chung-Hua Institution for Economic Research (CIER) reported positive trends in new orders, supplier deliveries, and inventories, signaling continued growth within the sector.

According to data from CIER, a leading economic think tank in Taiwan, the local March Purchasing Managers' Index (PMI), a key indicator of manufacturing health, rose to 54.2, a 0.2 increase from the previous month. Any PMI above 50 indicates expansion.

The service sector also saw positive movement. The non-manufacturing index (NMI) climbed to 53.8 in March, a 4.6 point increase, marking a return to expansion after a period of contraction in February. Like the PMI, any NMI reading above 50 signifies growth.

CIER President Lien Hsien-ming (連賢明) attributed the manufacturing surge, in part, to an early rush of orders. Buyers were keen to secure supplies ahead of potential impacts from the Trump administration's tariffs, leading to a surge in short-term orders.

Analyzing the March PMI components, the sub-indexes for new orders, supplier deliveries, and inventories all saw increases, reaching 56.8, 53.4, and 53.9 respectively. These indicators remained in expansion territory. However, production and employment sub-indexes showed slight declines, although they still remained in expansion mode. The business outlook for the next six months showed a strong increase as well.

Across industries, four out of six major sectors – electronics, food & textile, basic raw materials, and transportation equipment – experienced gains in March. The chemical & biotech and electricity & electric equipment industries showed a downturn.

CIER economist Chen Hsin-hui (陳馨蕙) highlighted the uncertainty surrounding whether buyers will sustain this order volume, given the ongoing tariff concerns.

Kamhon Kan (簡錦漢) from Academia Sinica expressed concerns about the business outlook amid fears surrounding the White House's potential tariffs, which were anticipated to be announced on April 2nd.

Turning to the NMI, all four major factors saw positive movement. However, the sub-index for the business outlook over the next six months decreased, falling to 48.8, indicating caution within the service sector, particularly given stock market volatility, geopolitical instability, and anxieties about potential electricity rate hikes.

The Ministry of Economic Affairs announced a freeze on power rate hikes on March 28th, driven by concerns regarding economic stability and inflation.

Looking ahead, Lien emphasized the potential for continued volatility in global financial markets in the coming months, driven by the ongoing tariff discussions.