Manufacturers optimistic: TIER

Manufacturers are optimistic about the nation's economic outlook for the next six months, but the post-election political unrest may hurt investors' confidence, an economist at the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.

"As the political situation looks gloomy and more uncertainties were created after Saturday's election, companies both at home and abroad have reservations about the economic environment," TIER president Wu Rong-i (吳榮義) said at a press conference.

The institute yesterday released a monthly confidence poll among domestic manufacturers carried out before the election.

The poll showed that 56.2 percent of the companies surveyed held bullish views about the economic outlook for the next six months, an increase of 2.8 percent from the previous month.

"The economic stimulus policies continuously introduced by the government and the rosy business prospects in the international environment have boosted companies' confidence," Wu said.

According to the report, 40.8 percent of the companies believed that economic prospects would remain unchanged, compared with 43 percent last month.

Three percent of those polled, however, were less optimistic -- a drop of 0.6 percent from last month's 3.6 percent.

The institute also made public a survey of the nation's business climate index (BCI) last month, which showed a slight increase from 117.46 points the previous month, to a record high 117.97 points, indicating that the majority of polled executives are confident about the future.

But in light of the nation's latest political developments, Wu said foreign investors may adopt a "wait-and-see" attitude for investment here. The TAIEX has suffered sharp losses following the disputed election.

Another economist is also concerned that the political turmoil has hurt consumer confidence.

"Political instability has caused some fluctuations in consumer confidence," said Chu Yun-peng (朱雲鵬), head of National Central University's research center for Taiwan Economic Development.

While a sense of caution prevails among consumers, Chu declined to elaborate on the scope of the fluctuations yesterday as the center is scheduled to release a detailed report on this month's index today.

Shin Kong Mitsukoshi Department Store (新光三越) and its local rivals have seen many shoppers stay away. Many people have been diverted by the political situation, and are showing little interest in making purchases.

"Customer traffic dwindled by around 10 percent last Sunday and Monday after the election," said Shauna Lee (李香萩), a spokeswoman for Shin Kong Mitsukoshi.

Pacific Sogo Department Store (太平洋崇光百貨) said its business was down by around 15 percent over the weekend.