Taiwan's manufacturing PMI shows the sector contracted for the fifth consecutive month in July, with its headline index falling to 46.2 from 47.2 in June. This is the lowest level for this index since August 2023. Respondents reported that global trade tensions have continued to have a significant impact on conditions and sentiment.

Survey respondents reported further sharp falls in output and new orders in July, while new export orders fell at the fastest pace in nearly two years. The survey showed another reduction in payrolls, while its measure of business confidence remains weak. Respondents reported a small increase input costs but another reduction in selling prices.

The Purchasing Managers' Manufacturing Index (PMI) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.