Taiwan's manufacturing sector continued to contract in May but at a softer pace as output growth slowed due to weakening demand, S&P Global reported Monday.

The S&P Taiwan Manufacturing Purchasing Managers' Index rose to 48.6 in May from 47.8 in April, remaining in contraction, as readings below 50 indicate.

Taiwanese manufacturers saw a notable slowdown in output and new order growth for the second month running. Goods producers reduced both their buying activity and staffing levels again in May.

On the price front, weaker demand led companies to lower their selling prices at the fastest pace in nearly two years. This was helped by a drop in input costs, the first since July 2023, data showed.

Looking ahead, the consumer confidence in the outlook was downbeat, as manufacturers expect a reduction in output over the next 12 months, the report said.