Taiwanese firms last month lost confidence in their business prospects for the next six months, as non-tech manufactures were weighed down by price competition from abroad and a slack economy in China, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment gauge for local manufacturers stood at 96.65, down 2.3 points from one month earlier and receding for the third consecutive month, it said.
The results come as the proportion of firms with a positive outlook fell to 20.6 percent, while firms with negative views climbed to 22.7 percent, the Taipei-based think tank said.
Photo: CNA
A growing number of steel and iron producers expect their business to worsen after the central bank last week tightened lending terms in an attempt to cool the housing boom, the institute said, adding that domestic suppliers were already grappling with rising competition from Chinese rivals.
Starting last week, Taiwanese home buyers must provide down payments of 50 percent to 70 percent if they own any other real estate, even partial or fragmented ownership resulting from inheritance, the central bank said.
The new loan restrictions would not affect the government’s favorable lending terms for first-time homebuyers who intend to use the property for self-occupancy; urban renewal projects; or old and dangerous buildings.
In contrast to other sectors, electronics suppliers appeared to gain some momentum, aided by robust demand for artificial intelligence and the launch of new products by global technology brands, the institute said.
Last week, Apple Inc released its latest-generation iPhone series and Apple watches, which created additional business for local firms in its supply chain.
Among service providers, business confidence fell 1.14 points to 97.88, shrinking for the second month in a row, TIER said.
This figure was affected by the lunar Ghost Month, when people traditionally shun getting married, closing deals or moving, the research body said.
At the same time, the fast and drastic TAIEX corrections dampened the so-called “wealth effect” and fueled caution about consumer spending, it said.
Retailers, financial companies and logistics service providers are upbeat that things would improve in the coming six months, while hotels and restaurants hold flat views, it said.
Business sentiment took a noticeable hit among local construction firms and real-estate brokers, shedding 4.57 points from one month earlier to 107.36, the institute said.
Loan restrictions already slowed property transactions last month and the impact would grow more evident from this month after the latest credit controls, it said.
Civil engineering firms would be less affected, as government agencies speed up construction on public works projects, it said.
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