Taipei: Taiwan's manufacturing activity showed improvement in April, driven by strong global demand for semiconductors and electronic components, the Chung-Hua Institution for Economic Research (CIER) reported on Monday. The April purchasing managers' index (PMI), an indicator of the manufacturing sector's climate, increased by 4.9 points from the previous month, reaching 60.3. This marks the seventh consecutive month of expansion, based on data compiled by CIER, one of Taiwan's leading economic think tanks.
According to Focus Taiwan, the service sector also experienced growth, with the nonmanufacturing index (NMI) rising by 4.0 points to 58.3 in April. This represents the 14th consecutive month of expansion. Both PMI and NMI readings above 50 indicate expansion, while those below 50 suggest contraction.
The PMI benefited from rising demand for AI-related devices and manufacturers increasing inventory to mitigate potential price hikes for petrochemical products due to the military conflict in the Middle East. All five major factors of the April PMI improved from the previous month, with sub-indexes for new orders, production, employment, supplier deliveries, and inventories rising by 6.4, 9.1, 3.5, 4.3, and 1.0 points, respectively, to 58.5, 57.4, 54.6, 70.6, and 60.4.
Additionally, the sub-index for the business outlook over the next six months rose by 2.9 points to 63.9 in April. However, despite the overall PMI increase, conditions among the index's six major industries varied, though they all remained in expansion. Sub-indexes for the chemical/biotech and electronics/optoelectronics industries declined, while those for the food/textile, basic raw materials, transportation tool, and electricity/machinery equipment sectors increased.
In the service sector, all four major factors-business activity, new orders, employment, and supplier deliveries-rose by 6.4, 3.2, 2.9, and 3.3 points, respectively, to 60.6, 60.2, 54.7, and 57.6 in April. The sub-index for the business outlook over the next six months also increased by 4.3 points to 56.7 in April.
CIER noted that demand for services from upscale clients in the manufacturing sector remained strong, with consumer spending rising ahead of Mother's Day, further boosting the service sector in April.