Taiwanese firms last month expressed mixed feelings about their business prospects in the next six months as exports gained traction, but “revenge consumption” tapered off, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said on Wednesday.
The sentiment gauge for local manufacturers last month rose 1.35 points, the third straight month of gains, as inventory adjustments of technology products wound down, the Taipei-based institute said.
TIER said that 18.8 percent of manufacturers were upbeat about their business going forward, down from 22.1 percent in August, while the firms with negative views rose 3.4 percentage points to 26.9 percent.
Photo: CNA
Most companies, including manufacturers of chemical, steel and electronics products, expect flat business ahead, it said.
Taiwan’s exports last month expanded 3.4 percent from a year earlier on the back of strong demand for information and communications technology products used in artificial intelligence applications, terminating a year-long contraction amid a global economic slowdown induced by inflation and monetary tightening, Ministry of Finance data showed.
Economic activity in the US and China showed signs of improvement, which is favorable for global private consumption, TIER said.
However, end-market demand has tempered, with interest rates high and geopolitical tensions scaling up amid the war between Israel and Hamas, it said.
Risk aversion would intensify if oil exporting countries rally behind Hamas and raise international crude prices, the institute said.
The confidence reading for domestic service providers shed 4.45 points to 92.48 last month, down for the second month in a row, TIER said.
The retreat had a lot to do with the end of the summer vacation, which is the high season for the tourism and hospitality sectors, it said.
A rout in the TAIEX helped weigh on earnings at securities houses and other financial institutes, it added.
Steep increases in restaurant and hotel charges helped drive away guests, while people tend to prefer more affordable travel in Southeast Asia, the institute said.
Still, service providers are largely positive about business in the next six months, as Taiwanese firms and families gear up for feasts and reunions toward the end of the year, it said.
The confidence measure for construction companies and real-estate brokers dipped 0.39 points to 101.21 last month, snapping three consecutive months of upticks, TIER said.
Firms reliant on civil engineering fared well, as government agencies accelerated construction of public projects, it said.
However, property developers turned cautious about the housing market as policymakers pledged further legal revisions to curb price hikes, it said.
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