| Actual | Previous | |
| Index | 56.1 | 55.3 |
Highlights
Taiwan's manufacturing PMI shows conditions in the sector strengthened further in May, with its headline index increasing to 56.1 from 55.3 in April. This is the highest level for the index since August 2021. Respondents again reported higher costs and supply delays due to the Iran conflict and, for the second month in a row, cautioned that increased production partly reflects precautionary stockpiling motivated by concerns about potential further disruptions and cost increases.
Survey respondents reported output and new orders rose at a faster pace in May, with new export orders reported to have risen at the same pace. The survey showed little change in payrolls, but its measure of business confidence increased, with demand for semiconductors and AI-related technology expected to remain strong. Respondents also reported input costs and selling both rose at near-record pace.
Definition
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.
Description
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.