The Taiwanese Economy in April 2026

Since the outbreak of hostilities in the Middle East, risks to energy supply have intensified, driving up international oil prices and global inflationary pressures. As financial market expectations for rate hikes by major central banks have grown, long-term government bond yields in major economies have risen accordingly, and volatility in financial markets has increased markedly. Against the backdrop of elevated energy prices and persistent supply chain pressures, manufacturing PMIs in the United States, the Eurozone, Japan, and China remained in expansionary territory in April; however, input and output price indices broadly rose across these economies, reflecting the cost pressures that global manufacturing is facing from geopolitical conflicts and supply chain disruptions.
On the domestic front, robust demand for AI continued to support growth across related supply chains. Nevertheless, geopolitical tensions in the Middle East have pushed up raw material costs and created instability in material supply. In addition, some manufacturers had front-loaded inventory purchases in March to guard against potential supply disruptions, resulting in a pronounced base effect in April. As a result, manufacturers' assessment of business conditions in April weakened compared to the prior month. Furthermore, with international geopolitical conflicts continuing to simmer, manufacturing firms largely expect business conditions over the next six months to remain broadly unchanged. In the services sector, finance-related industries benefited from a sharp rally in Taiwan's stock market in April, which repeatedly hit record highs, boosting investment income, fee revenue, and insurance business growth. Overall operating performance continued to improve, leading industry players to hold a positive view of business conditions for the month. That said, with geopolitical tensions unresolved, transportation and warehousing firms as well as banks tend toward a neutral outlook for the next six months.
The construction sector continued to benefit from sustained demand for technology firm office and plant projects. However, challenges related to the disposal of construction waste and cost pressures stemming from the Middle East conflict weighed on performance, resulting in broadly flat business conditions in April. Nevertheless, as relevant supporting measures are implemented and public works projects are progressively launched in the second half of the year, business conditions are expected to gradually improve over the next six months. In the real estate sector, a persistent gap in price expectations between buyers and sellers, the lack of support from a new housing delivery wave, and an increasingly cautious approach to home purchases have kept transaction momentum in the housing market persistently subdued.
Based on the results of TIER survey and model calculations, the composite indicators for manufacturing, services, and construction all rose in April. Among these, the manufacturing and construction indicators ended their respective two-month and three-month consecutive declines and turned upward, while the services indicator posted gains for the second consecutive month.
On the external trade front, buoyed by strong commercial opportunities in artificial intelligence, high-performance computing, and cloud services, shipment momentum for advanced chips and servers remained robust, and prices for certain products moved higher. Although the year-on-year growth rate in April fell short of March's level, it maintained double-digit growth. Export growth on a year-on-year basis eased from 61.9% in March to 39.0% in April 2026. On the import side, the year-on-year growth rate moderated from 38.3% in March to 29.2% in April; however, driven by deepening international division of labor within the AI supply chain and continued expansion of export-derived demand, procurement of semiconductor equipment remained at elevated levels. Combined with a significant rise in international energy prices, overall import momentum remained strong. For the cumulative period of January to April 2026, exports grew 47.8% compared to the same period in 2025, while imports grew 33.2%. The trade surplus reached USD 67.3 billion, a year-on-year increase of 116.9%.
On prices, international oil prices have remained elevated due to the Middle East conflict, pushing up domestic retail gasoline prices. Domestic airlines also simultaneously raised international airfare fuel surcharges, causing the year-on-year growth rates for fuel costs and transportation fees in April to expand noticeably compared to March. Together, these two items contributed approximately 0.45 percentage points to the overall CPI year-on-year growth rate, an increase of 0.37 percentage points from March. The overall CPI year-on-year growth rate rose from 1.20% in March to 1.74% in April, while the core CPI year-on-year growth rate edged down slightly from 1.94% to 1.91%. Regarding the PPI, military conflict between the United States and Iran caused a sharp increase in international petrochemical raw material prices, leading to significant price increases for petroleum and coal products, chemical materials, and plastic and rubber products. This drove the overall PPI year-on-year growth rate up from 3.94% in March to 8.54% in April.
Regarding labor-management negotiations to reduce working hours, as of the end of April 2026, the number of workers on reduced-hour arrangements stood at 3,632. The metal and machinery industry continued to account for the largest share of such workers, though the number in that sector has declined from earlier levels. On wages, the average total earnings per full-time domestic employee in March 2026 were NT$61,003, up 4.48% year-on-year. Regular earnings averaged NT$51,591, up 2.79% year-on-year. After adjusting for price changes, the cumulative average real regular earnings per person for January to March grew 1.90% year-on-year, while the cumulative average real total earnings per person grew 3.15% year-on-year.
On the stock market, despite continued volatility from Middle East conflict developments, the market was supported by strong revenue performance from technology companies, an optimistic fundamental outlook for the AI supply chain, and the Financial Supervisory Commission's announcement relaxing the single-stock holding limit for equity funds. These factors sustained fund inflows into large-cap technology stocks, repeatedly pushing Taiwan's stock market to record highs. The Taiwan Weighted Index closed at 38,926.63 points at the end of April, surging 22.71% from end-March, with average daily trading volume reaching NT$956.966 billion. On exchange rates, news of a US-Iran ceasefire prompted foreign investors to shift toward net buying of Taiwan stocks, with capital flows tilting toward inflows. Although subsequent US-Iran peace talks stalled, foreign investors continued to add to their Taiwan equity positions on the back of strong AI-related stock performance. Combined with a broad weakening of the US dollar internationally, the New Taiwan Dollar appreciated, closing at NT$31.648 per US dollar at the end of April, an appreciation of 1.25% from end-March.

Business Survey Outcomes

The proportion of manufacturing firms that reported improved business conditions in the current survey period was 30.0%, a drop of 19.7 percentage points from 49.7% in the prior month. Conversely, the proportion of those reporting a deterioration was 16.4%, an increase of 7.5 percentage points from 8.9% in the prior month. The remaining 53.6% assessed business conditions as unchanged, an increase of 12.3 percentage points from 41.3% in the prior month.
Looking ahead, the share of manufacturers anticipating an improvement in business conditions over the next six months stood at 28.7%, an increase of 1.7 percentage points from 27.0% in the prior month. Similarly, the proportion of firms foreseeing a deterioration in business conditions were 11.5%, slightly up 0.4 percentage points from 11.1% in the prior month. Meanwhile, the share of manufacturing firms expecting business conditions to remain unchanged decreased 2.1 percentage points to 59.8% from 61.9% in the prior month.
The Manufacturing Composite Indicator for April stood at 97.14, up 0.93 points from the revised March reading of 96.21. The Services Composite Indicator increased to 96.73, up 0.54 points from 96.19 in March. The Construction Composite Indicator increased to 94.67 in April, up 2.60 points from 92.07 in March, ending its third consecutive monthly decline and turning upward.

Analyses and Outlook of Industries

Following are manufacturers' sentiments that are industry-specific in the monthly TIER surveys:

Manufacturers' sentiments that have been in decline in the April survey and are expected to deteriorate over the next six months include:
Wood and Bamboo Products Manufacturing, Rubber Products Manufacturing, Motor Vehicles Manufacturing, Motorcycles Manufacturing.

Manufacturers' sentiments that have been in decline in the April survey, but are expected to improve over the next six months include:
None.

Manufacturers' sentiments that have been in decline in the April survey and are expected to remain sluggish over the next six months include:
Slaughtering, Edible Oil Manufacturing, Flour Milling and Grain Husking, Cutlery and Tools Manufacturing, Electric Wires and Cables Manufacturing, Audio and Video Electronic Products Manufacturing, Transport Equipment Manufacturing and Repairing, Motorcycles Parts Manufacturing, Bicycles Manufacturing, Bicycles Parts Manufacturing, Real Estate Investment.

Manufacturers surveyed who felt the April outlook was the same as the previous month, but the outlook is expected to exacerbate over the next six months include:
Textiles Mills, Industrial Chemicals, Petrochemicals Manufacturing, Plastics and Rubber Raw Materials, Man-made Fibers Manufacturing, Plastic Products Manufacturing, Non-metallic Mineral Products Manufacturing, Cement and Cement Products Manufacturing.

Manufacturers surveyed who felt the April outlook was the same as the previous month, but the outlook is expected to improve over the next six months include:
Food, Paper Manufacturing, Glass and Glass Products Manufacturing, Metal Structure and Architectural Components Manufacturing, Data Storage Media Units Manufacturing and Reproducing, Construction, Basic Civil Structure Construction, Wholesale.

Manufacturers surveyed who felt the April outlook was the same as the previous month and the trend is expected to continue for the next six months include:
Fabric Mills, Printing, Petroleum and Coal Products Manufacturing, Porcelain and Ceramic Products Manufacturing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal Dies, Screw, Nut Manufacturing, Motor Parts Manufacturing, Precision Instruments Manufacturing, Education and Entertainment Articles Manufacturing, Retail Sales, Restaurants and Hotels, Telecommunication Services.

Manufacturers' sentiments that have improved in the April survey and is expected to deteriorate over the next six months include:
Yarn Spinning Mills.

Manufacturers' sentiments that have improved in the April survey and is expected to remain upbeat over the next six months include:
Frozen Food Manufacturing, Soft Drink Manufacturing, Prepared Animal Feeds Manufacturing, Machinery and Equipment Manufacturing and Repairing, Industrial Machinery, Electrical Machinery, Supplies Manufacturing and Repairing, Electronic Machinery, Electronic Parts and Components Manufacturing, Insurance.

Manufacturers' sentiments that have improved in the April survey and the trend is expected to continue for the next six months include:
Manufacturing, Apparel, Clothing Accessories and Other Textile Product Manufacturing, Leather, Fur and Allied Product Manufacturing, Chemical Products Manufacturing, Electrical Machinery, Electrical Appliances and Housewares Manufacturing, Communications Equipment and Apparatus Manufacturing, Banks, Securities, Transportation and Storage.