Business sentiment improved noticeably across sectors last month as local firms gained better order visibility after major economies lifted pandemic-induced lockdowns and enabled a phased return to normalcy, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The confidence gauge for local manufacturers came in at 85.73, an increase of 4.22 points from a month earlier, the monthly survey by the Taipei-based institute showed.
The survey showed that 38.1 percent of companies expect business to pick up in the next six months, a solid increase from 23 percent in April, while those with a dim view of prospects fell from 36.5 percent to 22 percent.
“The uplifting sentiment lent force to expectations that the nation’s economy is bottoming out and would start to recover from next quarter,” TIER research fellow Darson Chiu (邱達生) told a media briefing in Taipei.
As the US and Europe reopen their economies, local firms have reported better order visibility, Chiu said.
While the COVID-19 pandemic would no doubt weigh on sales of consumer electronics, companies are less pessimistic, but would likely remain cautious before the crisis settles, he said.
Last week, the Ministry of Economic Affairs reported that export orders, a critical gauge of actual exports one to three months ahead, for last month grew modestly for a second straight month, backed by demand for electronic components.
Suppliers of auto parts, bicycles and home appliances also expect business to gain traction in the coming six months, but makers of plastic and petrochemical products are not yet out of the woods, the survey showed.
The sentiment reading for service-oriented firms gained 6.87 points to 89.68, as Taiwanese regained confidence in domestic tours, shopping and dining as the outbreak is contained, Chiu said, adding that consumer activity might grow stronger in the coming months with new stimulus measures.
The government is to distribute Triple Stimulus Vouchers of NT$3,000 per person from July 15 to shore up domestic demand.
The confidence measure for the civil engineering and building sectors added 9.99 points to 94.26, ending four months of decline, the survey showed.
Prospective buyers are expected to start searching for homes after staying on the sidelines during the outbreak, the institute said.
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