The seasonally adjusted Taiwan Manufacturing PMI registered 52.7 percent in February, an increase of 1.4 percentage points from January. As the COVID-19 outbreak is affecting supply chains and disrupting manufacturing activities around the globe, we urge analysts to look at sub-indices relating to new orders, production, supplier deliveries and inventories rather than the headline composite PMI index, as the latter is influenced by longer delivery delays, giving a reverse reading of health. The non-manufacturing sector faced serious impact from Novel Coronavirus Pneumonia (COVID-19) and turned to contraction for the first time since March 2019. The Taiwan NMI dropped 14.6 percentage points to 40.4 percent in February, with the fastest contraction rate and also the biggest month-to-month decrease since August 2014.