Business sentiment last month remained listless among local manufacturers due to continued weak end-market demand, but a sizeable number are looking at business picking up ahead, as the high sales season for technology products approaches, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The confidence gauge for the manufacturing industry was 89.3, shedding 2.02 points from April, as inventory adjustments lingered, TIER Economic Forecasting Center director Gordon Sun (孫明德) said.
However, the ratio of companies with positive views increased by 4.6 percentage points to 29.9 percent, while companies with a gloomy outlook fell by 0.7 percentage points to 24.4 percent, the monthly survey said.
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Food, leisure and printing product manufacturers were upbeat, while suppliers of chemical, machinery and metal products, as well as transportation tools, were conservative, TIER said.
International research bodies recently raised GDP growth forecasts for the world, the US and Japan, lending support for the sentiment upturn, Sun said, adding that global firms also breathed a sigh of relief after the US Federal Reserve moved to keep interest rates unchanged.
“The worst is likely over, but it remains to be seen when the process of bottom building will come to an end and usher in a meaningful recovery,” Sun said.
The nation’s key economic barometers stay in negative territory, but their pace of decline has slowed down, he said.
Specifically, local firms in Apple Inc’s supply chains might benefit from its upcoming release of new iPhone series, and other electronics suppliers would enjoy growing demand for electric vehicles and artificial intelligence applications, the institute said.
Global technology brands might adopt a cautious approach to inventory building this time on concern inflation remains high, boding ill for spending on technology gadgets, Sun said.
Private consumption economic data appear to be the strongest, in light of robust retail revenue and auto sales, explaining why the business confidence among service providers edged up 0.57 points to 99.14, TIER found.
The rallies in the local bourse and foreign tourist arrivals helped drive up private consumption, Sun said.
Retailers, wholesale operators, restaurants, logistics and warehousing service providers are looking at continued business improvement in the coming six months, the institute said.
By contrast, construction companies and real-estate brokers stalled, as they remain under cost pressures despite raw material price declines, it said.
Furthermore, demand for housing and industrial factories subsided amid unfavorable policy measures, TIER said.
As a result, the sentiment reading for construction and property sectors dropped by 0.95 points to 93.47, it said.
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