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Investing.com -- Taiwan’s manufacturing sector showed signs of moving closer to stabilization in October, with business conditions deteriorating at the weakest pace in five months, according to the latest S&P Global Taiwan Manufacturing PMI data.
The seasonally adjusted PMI rose to 47.7 in October from 46.8 in September, though it remained below the crucial 50.0 threshold that separates growth from contraction. The manufacturing sector has now experienced deteriorating conditions for eight consecutive months.
Production and new orders both continued to decline in October, but at the slowest rates since May. Manufacturers attributed lower production to weaker customer demand, with new business falling across both domestic and international markets.
New export orders fell markedly, with companies specifically citing lower sales in the US due to tariffs. Weaker demand was also reported from Europe, mainland China, and Japan.
Price pressures intensified in October, with input costs rising at the sharpest rate since July 2024. Companies passed these higher costs on to customers, leading to the most pronounced increase in selling prices in ten months.
Employment across the sector was nearly stable in October, declining only fractionally at the weakest rate recorded since February. Companies that reduced headcounts generally did so by not replacing voluntary leavers.
Purchasing activity continued to contract at a sharp pace, and firms maintained a cautious approach toward inventory levels. Stocks of pre-production items declined at the steepest rate in 21 months.
Despite ongoing challenges, the outlook showed some improvement. While companies remained generally pessimistic about output over the next year, the degree of negative sentiment was not as severe as in the previous three months.
"October’s PMI survey suggested that business conditions across Taiwan’s manufacturing sector moved closer to stabilising," said Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence. "The latest survey also pointed to stronger inflationary pressures, with input costs rising at the quickest rate in over a year."
Fiddes added that alongside other developments, the data "hints that the worst of the current downturn is now behind us."
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