Taiwan Sept. PMI shows fourth straight contraction

Taipei, Oct. 1 (CNA) Taiwan's manufacturing sector remained in contraction for the fourth consecutive month in September, with the seasonally adjusted purchasing managers index (PMI) inching up 0.4 points to 48.3, the Chung-Hua Institution for Economic Research (CIER) said Wednesday.

The survey showed new orders and the six-month business outlook were both in contraction for a sixth month, though each improved slightly.

Notably, all six major manufacturing industries reported employment contraction for the first time since October 2023.

The electric power and machinery equipment sector was the only one to post growth, supported by U.S. demand for power equipment rather than a rebound in machine tools, CIER Vice President Chen Shin-horng (陳信宏) said at a news briefing.

Academia Sinica economist Kamhon Kan (簡錦漢) said AI-related industries, including semiconductors, servers, and heavy electrical equipment, continued to fare well, while autos, petrochemicals, and machine tools struggled under tariff pressure.

Analysts said weak global demand and U.S. protectionist policies have left firms cautious, with the full impact of tariffs expected to emerge in early 2026.

Pai Tsung-cheng (白宗城), head of the Supply Management Institute, Taiwan, noted that businesses are relying more on short-term "nowcasting" than long-term forecasts amid heightened uncertainty.

In the service sector, the nonmanufacturing index (NMI) rose 1.4 points to 52.1 in September, marking a seventh straight month of expansion on the back of stock market gains, new tech product launches, and seasonal demand. The sector's six-month outlook improved but remained in contraction at 42.1.

PMI and NMI readings above 50 indicate expansion, while those below 50 signal contraction.