Taiwan's factory activity expanded at a slower pace in August, with the headline S&P Global Taiwan Manufacturing Purchasing Managers' Index (PMI) falling to 54.7 from 55.1 in July, data released Tuesday showed.

The latest reading, which gauges conditions in the manufacturing sector, was the lowest in five months but remained above the 50 mark, signaling a continued expansion in sector activity.

A reading above 50 indicates an expansion in sector performance, while a figure below signals a contraction.

Despite the moderation, the reading pointed to a further improvement in the overall health of Taiwan's manufacturing industry.

The growth was driven by sharp increases in production and new orders, though the expansion rates have slowed since July.