Taiwan's manufacturing sector showed signs of recovery in March as the rate of contraction slowed down, according to data from S&P Global. The manufacturing Purchasing Managers' Index (PMI) saw an upturn to 49.3 in March, rising from February's 48.6. Nevertheless, a score less than 50 still signifies contraction in the sector.
The pace at which output and new orders decreased in March was slower compared to February. Despite this, demand for goods from both local and international sources was still relatively low. Particularly, there was a noted drop in export demand from major markets including Mainland China, Europe, and the United States.
The slowdown in sales and output in March pushed companies to cut back both on employment and purchasing activities. On the pricing front, increased supply-side conditions and lesser cost inflation led to a softening of input price inflation at a seven-month low in March, resulting in firms lowering their selling prices.
Paul Smith, the Economics Director at S&P Global Market Intelligence, pointed out the silver lining in the situation. He noted an encouraging surge in expectations, with confidence in the future reaching almost a three-year high. With signs of price and supply stability, this is fostering a more optimistic outlook for the sector.
