Manufacturing sentiment dips in November: TIER

A manufacturers business climate index last month dipped to its lowest level since 2003, a think tank survey released yesterday showed.

The index slid 6.44 points to 110.35 points last month from October's 116.79 points -- the lowest since April 2003, when SARS broke out, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.

That pessimistic sentiment echoed a survey conducted by the institute, which found a majority of respondents had a negative economic outlook last month.

"Rising raw material prices have hurt local manufacturers' profits. And the manufacturing sector's peak season has come to an end, which was why manufacturers were so pessimistic in November," TIER president David Hong (洪德生) told a press briefing.

Manufacturers, however, were more optimistic on the economic outlook in the next six months. The institute's survey found that 22 percent of manufacturers, up from October's 14.6 percent, were upbeat. The majority of manufacturers, 59 percent, held a neutral view on future economic prospects, while the remaining 19 percent, down from October's 23.5 percent, were pessimistic.

"Most manufacturers are cautiously optimistic about next year, which may support the theory the local economy will steadily expand," Hong said.

Despite the subprime mortgage crisis possibly triggering an economic recession in the US, consumer confidence has not dropped drastically and a pickup in demand from emerging nations has reassured manufacturers that export orders may not see big drops, the institute's report said.

In addition, a lackluster stock market performance drove down the service sector's business climate index by 0.52 points to 114.41 points last month.