Taiwan manufacturing expands for 9th month, growth pace eases in June

Taipei, July 1 (CNA) Taiwan's manufacturing sector continued to expand in June, with the purchasing managers' index (PMI) at 60.7 points, marking the ninth straight month of growth despite a slight slowdown, the Chung-Hua Institution for Economic Research (CIER) said Wednesday.

The June PMI, which gauges the manufacturing sector's performance, fell 0.7 points from 61.4 in May, with slower expansion in supplier delivery times and inventories driving the moderation, CIER President Lien Hsien-ming (連賢明) said at a press conference.

PMI readings above 50 signal expansion, while those below 50 indicate contraction. In June, all six major manufacturing industries showed expansion in their unadjusted PMI, the data showed.

Ranked by pace, electronics & optics led with 66.1 points, followed by electrical & machinery equipment (60.2), transportation equipment (57.6), food & textiles (57.0), basic materials (52.7), and chemical & biomedical industries (50.9), according to the CIER.

The data showed that although the index slipped, it remained at a relatively high level, with expansion still proceeding at a rapid pace, driven by strong global demand for artificial intelligence (AI) supply chains, Lien said.

Meanwhile, Kamhon Kan (簡錦漢), a researcher at the CIER's economic division, cautioned that the issue of "AI inflation" must be watched closely.

If surging AI demand drives up raw material prices, consumers could bear the cost of the boom, with reports suggesting the price of the iPhone 18 could rise by up to 30 percent, Kan said.

In the service sector, the Non-Manufacturing Index (NMI) rose 1.7 points in June to 59.9, the fastest pace of expansion since December 2021, the data showed.

All eight major service industries reported expansion in their outlook, led by retail (72.5 points), accommodation & food services (70.8), education & professional/scientific services (67.1), finance & insurance (65.4), and construction & real estate (60.9). Each sector posted future outlooks above 60 points and signaled strong growth momentum, the data showed.