TAIPEI: Taiwan's manufacturing sector continued to expand in December, though at a reduced pace, as indicated by the latest purchasing managers' index (PMI) data released on Thursday. This marked the second consecutive month of expansion, with the index registering 50.8, down from the previous month's 51.4, reflecting a cautious market environment.

According to Focus Taiwan, the PMI, compiled by the Chung-Hua Institution for Economic Research (CIER) through surveys of local businesses, showed declines in key subindexes such as new orders and production, which fell to 50.9 and 52.1, respectively. These decreases were attributed to uncertainties surrounding end-user demand. Meanwhile, employment and supplier deliveries saw modest increases, reaching 51.1 and 52.5. However, inventories remained in contraction at 47.4.

The business outlook subindex for the next six months experienced its largest drop since January 2024, falling to 46.1, marking the fourth consecutive month of contraction. CIER President Lien Hsien-ming highlighted the presence of unexpected rush orders, particularly for electronic components, driven by concerns over potential U.S. import duties under President-elect Donald Trump.

Lien noted that political and economic clarity regarding U.S. and China relations is anticipated post-inauguration on January 20. In contrast, Taiwan's service sector showed resilience, with the non-manufacturing index rising to 56.5, continuing its 26-month expansion streak. The business outlook in this sector remained positive, despite minor declines due to regulatory actions on property speculation.

The commercial property market remains robust, even as the residential sector faces challenges, highlighting a divergence within Taiwan's real estate landscape.