TAIPEI (Taiwan News) — The Taiwan Institute of Economic Research on Friday reported a 1.49-point month-on-month rise in September manufacturing sentiment, lifting the indicator from recessionary “blue” to “yellow-blue.”

The reading reached its highest level since US President Trump’s tariff announcement in April, ending four straight months of “blue” lights from May to August, per Commercial Times.

TIER said the continued depreciation of the New Taiwan dollar since August and expectations of US rate cuts have eased manufacturers’ pessimism. The institute added that the recent Xi–Trump meeting in South Korea brought some easing to escalating trade tensions.

For Taiwan, the technology sector — supported by demand for AI applications and new consumer electronics — is expected to maintain momentum. Traditional industries also showed signs of recovery during the year-end peak purchasing season, slightly narrowing the gap with high tech.

However, with no concrete progress in Taiwan–US tariff negotiations, manufacturers remain cautious about the outlook.

TIER noted that while global manufacturing recovery remains weak, both US and Chinese purchasing managers’ indexes improved in September from the previous month. Domestically, strong demand for electronics and information and communication technology (ICT) products kept exports and export orders at healthy levels.

While markets for traditional products remain unstable, they continue to benefit from year-end international purchasing demand, helping narrow the year-on-year export decline. These trends have boosted demand, prices, and raw-material input indicators.

In machinery, TIER cited two improvements in September: rising demand for production and automated warehousing equipment due to capacity expansion by major semiconductor manufacturers, and stronger year-on-year export growth to Europe and ASEAN alongside higher orders from the United States.

Despite geopolitical headwinds, Taiwan’s September exports of electronics and ICT products remained robust, supported by strong AI and consumer electronics demand.

In TIER’s monthly business outlook, 22% of manufacturers reported improved conditions, 25.1% saw deterioration, and more than half reported stability. Outlooks for the next six months improved slightly, with the manufacturing composite index rising to 91.65, the services index down to 85.23, and the construction index up to 97.35.