US ISM Services Business Activity Rises to 55.9, Sticky Inflation Becomes a Concern

Taiwan's Q2 Manufacturing PMI Surges to 60.3! Ignited by the Dual Engines of AI and Pre-war Stockpiling, Hitting an Over Four-and-a-Half-Year High

Taiwan's manufacturing sector is expanding fiercely! According to the latest data, Taiwan's Manufacturing Purchasing Managers' Index (PMI) for April 2026 (Q2) surged significantly from the previous value of 55.4 to 60.3, a massive single-month increase of 4.9. This figure not only marks the PMI's seventh consecutive month of growth, staying firmly above the 50 boom-or-bust threshold, but also sets the record for the fastest expansion since September 2021. The overall manufacturing sector has welcomed a strong start at the beginning of the second quarter, demonstrating immense explosive power. Breaking down the component indicators, strong demand is directly reflected in the record-breaking sub-index data. Among them, the supplier deliveries index soared to 70.6%, marking the fastest rate of increase since July 2021; the raw materials prices index also surged to 87.3%, setting a new high since April 2022. Faced with prolonged delivery times and rising prices, enterprises proactively established buffer levels, driving the inventory index up to 60.4, simultaneously pushing both new orders and production volumes to show a significant rebound. The driving force behind this contrarian surge in the PMI comes from the power of "dual engines." The Chung-Hua Institution for Economic Research (CIER) pointed out that recent geopolitical turmoil in the Middle East has led to rising prices for raw materials such as plastics and extended shipping delivery times, igniting a strong "wave of advance pull-ins" among manufacturers. On the other hand, the pull-in momentum for AI servers and semiconductor-related products remains robust, with electronic components continuing to face shortages and price hike effects. Under the dual blessing of hedging inventory buildup and substantial demand from the tech industry, these factors combined to ignite the surge in the index. Although the six-month outlook index for the manufacturing sector recovered to 63.9%, a severe "K-shaped divergence" has emerged among industries. In the short term (1-2 months), benefiting from excellent order visibility, the high-value-added electronic optics and electrical machinery industries will continue to support the broader market; however, traditional industries such as chemicals, food, and transportation equipment face contraction due to cost pressures. In the medium term (3-6 months), scholars from Academia Sinica warn that current economic momentum is overly concentrated in the single AI industry. If the momentum of AI investment slows down in the future, or if Europe and the US delay interest rate cuts due to a resurgence of inflation, it may cause severe fluctuations in Taiwan's highly export-reliant economy. Web Search Reference Sources: https://www.capitalfutures.com.tw/zh-tw/financial/globalarticle?contentid=c26050500274&category=all https://www.rti.org.tw/news?uid=3&pid=206456 https://money.udn.com/money/story/10869/9481285