October PMI Expands Further to 62.5% as Momentum Slows

黃黃郁婷 產業線記者2026-11-02 18:04

Browser TTS · no download

30-second brief

The Chung-Hua Institution for Economic Research reported the seasonally adjusted October manufacturing PMI at 62.5%, down 0.9 percentage points from the previous month, expanding for a 13th consecutive month but with slowing momentum, mainly due to shortages of key materials and lengthened delivery times. AI demand remains strong, with no reversal in the outlook.

Manufacturing Expands for 13th Month as Momentum Eases

Chung-Hua Institution for Economic Research reported the seasonally adjusted October manufacturing Purchasing Managers' Index at 62.5%, down 0.9 percentage points from the previous month, marking a 13th consecutive month of expansion but at a slower pace. Among the components, the leading-indicator new orders index fell another 0.4 percentage points to 63.2%, remaining above 60% in expansion; the backlog of orders index fell to 53.9%, the slowest pace of expansion since January 2026; the supplier delivery time index and raw materials price index stayed at high levels around 70%.

Electronics Falls to 60% as Key Material Shortages Constrain Deliveries

By industry, the October electronics and optical industry PMI fell another 2.6 percentage points to 60.0%, the slowest pace of expansion since March 2026, with the pace of expansion in new orders slowing markedly from the first half of the year. The CIER noted that demand for AI servers and high-end electronics applications remains strong, but insufficient supply of key materials, mismatched long- and short-lead materials, and rising costs continue to affect order fulfillment and production momentum; consumer electronics saw relatively weak performance in components and IC design as price increases weighed on end-market demand.

President: Orders Remain; Whether They Can Be Delivered Is the Key

President Lien Hsien-ming said the recent slowdown in AI industry expansion mainly reflects shortages of key components — first memory, and more recently substrates — which have lengthened delivery times. He stressed that orders are still there, and the key is whether they can be fulfilled, which is also why the six-month outlook remains elevated. Associate Research Fellow Chen Hsin-hui added that with the PMI still at a high level, whether production and delivery can proceed smoothly and be converted into cash flow is the key. Vice President Chen Hsin-hong cited Google's earnings, where search business came in below expectations, as an example that cloud service providers also face challenges from changing usage habits after AI adoption, adding that ups and downs in the industry are reasonable and the slowdown should not be read as a reversal.

Non-Manufacturing NMI at 55.4%, Expanding for 20th Month

The CIER also reported the unadjusted October non-manufacturing managers' index at 55.4%, down 1.5 percentage points from the previous month, expanding for a 20th consecutive month. With the fourth-quarter domestic demand peak season underway, travel bookings, accommodation and food services, retail, and transportation and warehousing continued to expand, but cooling business activity in finance and insurance, wholesale, and information and communications slowed the pace of expansion. The CIER said high-end demand remains supportive, and securing key materials, ensuring on-time delivery, and reasonably reflecting costs will shape manufacturing momentum in 2027.

FAQ

How did Taiwan's October manufacturing PMI perform?

The seasonally adjusted October manufacturing PMI was 62.5%, down 0.9 percentage points from the previous month, expanding for a 13th consecutive month but at a slower pace, with new orders at 63.2%, backlog of orders at 53.9%, and supplier delivery times and raw materials prices holding at high levels around 70%.

Why is there noise around the AI boom?

It mainly reflects shortages of key materials and mismatched long- and short-lead materials — first memory, and more recently substrates — which have pushed up costs and lengthened delivery times, along with rising market doubts over the returns on large investments, and price increases in consumer electronics weighing on end demand, affecting delivery and production momentum.

Does slower expansion mean a reversal?

The CIER said it should not be overinterpreted. The PMI remains at a high 62.5%, orders remain in hand, and the bottleneck is a global issue, with the six-month outlook staying elevated. The key is whether key materials can be secured, deliveries made on time, and margins maintained.