-- Taiwan's manufacturing sector strengthened in April, with the S&P Global Taiwan Manufacturing Purchasing Managers' Index (PMI) rising to 55.3, the highest level since December 2021.
The PMI increased from 53.3 in March, signaling a fifth consecutive month of expansion and a sharper improvement in business conditions.
The rise was driven by stronger output and new business, with firms citing higher demand as well as efforts to build inventories ahead of expected supply disruptions and price increases linked to the Middle East conflict.
"The war contributed to the greatest disruption to supply chains since the COVID-19 pandemic and a substantial rise in input costs at the start of Q2," said Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence.
Taiwanese manufacturers reported a sharp increase in new orders, including export demand from the U.S., Europe, mainland China, Japan, and Southeast Asia, with stockpiling activity supporting growth.
Purchasing activity rose at one of the fastest rates in nearly four-and-a-half years, although supplier delivery times lengthened at the quickest pace in just over four years, reflecting heightened supply chain strain.
Input prices increased at one of the fastest rates since the survey began in 2004, driven by higher raw material and energy costs, while output charges rose at the steepest pace since late 2021 as firms passed on cost pressures.
"Expenses rose at one of the fastest rates since the survey began 22 years ago amid widespread reports of supplier price hikes, with rising oil prices a key driver of inflation. These higher costs were often passed on to clients, with selling prices also rising at a substantial pace," Fiddes added.
Employment declined slightly as firms chose not to replace voluntary leavers, while backlogs of work increased at one of the quickest rates since late 2021.
Business confidence remained positive but eased to a three-month low, with firms citing uncertainty linked to the Middle East conflict, according to S&P Global.
The strength in manufacturing aligns with broader economic momentum, as Taiwan's gross domestic product expanded 13.7% year-on-year in the first quarter, driven by strong external demand tied to artificial intelligence, according to the Directorate General of Budget, Accounting and Statistics.