Business confidence last month picked up among local manufacturers, with the worst over and foreign trade as well as private investment likely to turn positive next quarter, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment gauge for the manufacturing industry rose 3.69 points to 91.39, ending three months of declines thanks to the arrival of the high sales season for technology products, although the advance is not significant, the Taipei-based think tank said, citing a monthly survey.
“Exports of information and communications technology products put up strong showings, driven by booming demand for artificial intelligence applications,” TIER president Chang Chien-yi (張建一) said.
Photo: CNA
Though the artificial intelligence boom has not been enough to offset tepid demand for smartphones and personal computers, the situation is not as bleak as in previous months, Chang said.
Exports, equivalent to 60 percent of GDP, might improve in the fourth quarter and stage a meaningful recovery next year, he said, as global technology brands stand by a cautious approach to inventory.
Central banks in advanced economies would maintain tight monetary policy stances this year to make sure inflation is moving back toward the target range, unfavorable for nonessential goods, he added.
The number of firms with optimistic views of the next six months gained 3 percentage points to 22.4 percent, while firms with a negative outlook dropped 6.7 percentage points to 23.4 percent, the survey found.
Major manufacturers of chemical, steel and electrical machinery products are looking at flattish business, it showed.
China’s economic recovery also plays an important role in Taiwan’s exports given that nearly 40 percent of outbound shipments are destined for that market, Chang said.
Beijing is likely to introduce more stimulus measures to support its economy, he said.
The confidence reading for the service sector showed a slight increase of 0.04 points, as restaurants and hotels benefited from the summer vacation period, but voiced concern that a lack of workers would limit growth.
When Taiwan started to emerge from the COVID-19 pandemic in the second half of last year, some companies raised doubts that pent-up demand would be sustained, the institute said.
The confidence measure for construction firms and property brokers rose 0.83 points to 96.01, increasing for the second straight month, it said.
Government agencies have sped up construction of public works projects to help prop up domestic demand, TIER economist Arisa Liu (劉佩真) said.
By contrast, property developers and brokers hold more conservative views as the government has frowned upon property price increases and would be likely to take action to stem an uptrend if necessary, Liu said.
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