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Taiwan PMI February 2024

Taiwan: Taiwan manufacturing sector sees deterioration in February

The S&P Global Taiwan Manufacturing Purchasing Managers’ Index (PMI) fell to 48.6 in February from 48.8 in January. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing sector operating conditions compared to the previous month.

February’s reading—which marked the twenty-first consecutive month of declining business conditions—was primarily driven by reductions in production and new orders. Moreover, a decrease in customer spending led to sustained drops in purchasing activity and inventories.

February saw a further easing of cost pressures, with input price inflation reaching a six-month low. In an effort to attract new business, firms reduced their selling prices for the second consecutive month, although the rate of reduction was slight. Despite the challenging economic environment, business confidence remained strong, underpinning a slight increase in employment and optimism around the 12-month outlook for output.

Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said:

“There were […] signs that the current inventory destocking cycle was fading, as firms reported the slowest reductions in stocks of inputs and finished items for over a year-and-a-half. While the above suggests that firms are optimistic about the coming months, we still need to see an overall improvement in client spending to support a recovery of the sector. At the same time, supply chains will need to be carefully monitored to see how the Red Sea shipping disruptions might impact vendor performance or push up costs.”

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