Business confidence last month weakened slightly among Taiwan’s manufacturers as demand diminished for devices used in distance learning and remote working, a survey released yesterday by the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) found.
The business sentiment gauge for the manufacturing sector fell 1.99 points to 101.64 — a fifth consecutive month of decline as the stay-at-home economy loses momentum — ushering in an inventory correction cycle for some local electronics suppliers, the Taipei-based think tank said.
That accounted for why many firms said they were neutral or had turned cautious regarding their business prospects over the next six months, the monthly report said.
Photo: CNA
The number of companies with a rosy outlook shed 3.5 percentage points to 31.3 percent, while the number of those with negative views gained 4 percentage points to 14.9 percent, the report said.
Firms selling DRAM chips, smartphone cameras and LCD panels reported inventory adjustments, TIER said, adding that the adjustments were necessary even though sales prices for semiconductors climbed higher due to lingering supply tightness.
Firms making chemical and plastic products were also looking at a business slowdown, it said.
By contrast, the business confidence reading for service providers increased 2.11 points from a month earlier to 95.38 — a second consecutive month of growth, it said.
Most restaurants and retailers saw an improvement in business after health authorities eased capacity restrictions and social distancing, it said, adding that most securities firms reported a downturn in business due to volatility on the TAIEX.
Department stores, hospitality providers, banks and insurance firms share a positive outlook, expecting revenue to rise this quarter ahead of the peak season, it said.
Revenue would also receive support from anniversary sales and the government’s Quintuple Stimulus Vouchers program, in which each voucher packet is valued at NT$5,000, it added.
Firms in other sectors are looking at flat sales, it said.
The business confidence of construction firms and real-estate brokerages rose to 110.82, up 3.78 points from August, encouraged by a recovery in the price of concrete due to housing sales, it said.
Developers showed their confidence by increasing the number of new projects for the fall sales season, the institute said.
Buyer interest also picked up after the local COVID-19 situation eased, it said.
Excessive liquidity and ultra-low interest rates have lent support to the property market, despite unfavorable government measures meant to rein in property price hikes and loose lending, it said.
Most developers and property brokers are confident that the market would continue to see a recovery, with only a slight chance of price corrections, it said.
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