TIER survey indicates manufacturers' optimism

Local manufacturers have become more optimistic about business prospects for the next six months, backed by the stabilizing of raw material prices and the coming of high season, according to a monthly survey by the Taiwan Institute of Economic Research (TIER, 台經院).

The survey, released yesterday, showed that the business climate index in the manufacturing industry last month rose to 114.12, up from 112.64 one month earlier.

Up to 56.7 percent of companies polled said last month that they are bullish about the business outlook for the following six months, a jump from 36 percent in January, the poll showed.

The bears accounted for 10.5 percent, down from 12.4 percent, over the same period, the survey said.

TIER researcher Chen Miao (陳淼) attributed the optimism to lower manufacturing costs coming in the wake of stabilized raw material prices and the coming of peak season for the high-tech industry that usually starts in July.

Meanwhile, the research institute also released its business sentiment index for the service industry, which slid to 109.67 last month from 111.20 in January.

Retailers and wholesalers experienced a bonanza during the Lunar New Year holiday, while at the same time fewer work days lessened the revenue of brokerage businesses, TIER said.

The banking sector also had a hard time, as a result of shrinking activity in consumer lending amid the fallout of consumer credit abuse as well as cutthroat competition and limited growth in corporate banking, syndicated loans and mortgage loans, it said.

Yet results showed that entrepreneurs in the service sector remain cautious about the domestic economic outlook, TIER said.

Meanwhile, as people grow increasingly concerned about the nation's sizzling property market, TIER said it did not expect a bubble that will eventually burst.

The supply side remains mild and healthy while the demand side appears robust with a sale rate as high as 97 percent in Taipei's pre-sale housing projects and an average of 67 percent nationwide, TIER's senior analyst Arisa Liu (劉佩真) said.

Vacancies that amount to 1.03 million units nationwide, or equivalent to 13.9 percent of housing supply, remains tolerable, she said.

The relatively low interest rate for mortgage loans is expected to climb no higher than 3.5 percent this year since the central bank's measured rate hike policy is unlikely to impact the housing market, Liu said.