Taiwan's Manufacturing Sector Returns to Growth in December for First Time Since February

Taiwan's manufacturing sector returned to growth territory in December 2025, as the S&P Global Manufacturing PMI climbed to 50.9, up from 48.8 in November. This marks the first improvement in operating conditions since February. The rise indicates a positive shift in industrial activity, supported by better demand and relatively stable external sales, even as global economic growth remains subdued.

Data showed that both output and new orders increased for the first time since March, with companies reporting improved demand conditions and steady export orders - signaling the beginning of a gradual recovery. Production volumes grew modestly, and purchasing activity as well as inventories were up, reflecting expectations of better sales ahead.

On the downside, employment levels dipped slightly as firms remained cautious in hiring amid mounting cost pressures. Input costs surged at the fastest pace in about 17 months, driven by higher raw material prices and supply shortages. Output prices, however, saw only limited increases due to weak pricing power among manufacturers.

The survey also indicated improved business confidence, with production expectations for the next year at their highest since March, suggesting cautious optimism for further recovery.

EcoPulse24 Analysis: The return of Taiwan's PMI above 50 signals a significant turning point after a prolonged contraction, underpinned by stronger domestic demand and stable exports. However, ongoing cost increases and weak pricing power remain key challenges for profit margins, explaining continued hiring caution. Overall, the data points to a gradual and cautious recovery, with its sustainability depending on global demand and supply chain stability in 2026.