Taiwanese manufacturers were last month slightly more negative about their business prospects for the coming six months, as a supply glut continued to plague petrochemical suppliers and electronics makers remained cautious largely about end-market demand, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The manufacturers’ confidence reading shed 0.57 points to 93.2, as the global economy showed signs of improvement, but at a slow pace, limiting room for selling prices to increase, the institute said.
Petrochemical makers were especially affected, as they had to cope with rapid capacity expansion from Chinese competitors and extended anti-dumping duties imposed by China, it said.
Photo: CNA
Although the US Federal Reserve recently indicated that its monetary tightening cycle is nearing an end, the impact of high interest rates would linger for quarters to come, which would be bad news for consumer spending in the US, the main end-market for technology products, TIER economist Gordon Sun (孫明德) said.
Manufacturing business sentiment also took a hit from geopolitical tensions linked to attacks by Yemen’s Houthi militants on cargo ships in the Red Sea, Sun said.
That helped explain why more than 60 percent of chemical and petrochemical suppliers are expecting a decline in business over the next six months, although global semiconductor inventory has returned to healthy levels, TIER said.
However, the economy would perform better next year due to restocking demand that would shore up global trade, as well as Taiwan’s exports and private investment, TIER president Chang Chien-yi (張建一) said.
Meanwhile, the local service sector’s confidence gauge reached 91.17 last month, up 1.37 points and reversing three previous months of declines, the institute said.
Retailers, restaurants, logistics providers, life insurers and securities brokerages were all positive about their business outlook, while banking institutions were neutral, it said.
Construction firms and property brokers registered a collective confidence score of 102.82, up 3.42 points from a month earlier, TIER said.
The improvement had a lot to do with the traditional high season for new house deliveries being near the end of the year and a continued increase in first-home purchases, as people were taking advantage of preferential lending terms, Chang said.
The government introduced the stimulus measure in August to support people with real demand, while raising holding costs for multiple home owners and short-term property investors.
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