The nation’s manufacturing and service industries expressed mixed sentiment on the business climate for the second half of this year when overseas demand for electronic products is expected to peak, while surging energy and raw material costs are set to trim profits, a local research body said yesterday.
The Taiwan Institute of Economic Research (TIER, 台經院), which surveys the manufacturers and service providers each month, said that more respondents turned cautious about the outlook for the remainder of the year in last month’s poll.
“The number of manufacturers bullish about their business prospects stood at 33.5 percent last month, down from 35.5 percent surveyed in April,” TIER president David Hong (洪德生) told a media briefing.
RISING COSTS
Respondents that were neutral increased from 44 percent to 46.7 percent during the same period, while the number of pessimists hardly changed, 19.8 percent last month, down from 20 percent a month earlier, the TIER report showed.
Hong attributed the cautious sentiment to the fact that some manufacturers were hesitating transferring their rising costs to consumers, even though fuel and raw material prices are continuing to rise.
As exports comprise a large slice of the nation’s GDP, the Taipei-based research institute put its business climate index for the manufacturing sector at 110.02 points last month, up 3.18 points from April.
Chen Miao (陳淼), a research fellow at TIER, said he was cautiously optimistic that exports would continue to bolster the nation’s economy in the third and fourth quarters, as they had in the first quarter, despite the US economic slowdown.
MORE UPBEAT
The service sector appeared slightly more upbeat on prospects, with the business climate index for this sector reaching 122.31 points last month, compared to 121.84 points in April, the TIER survey showed.
Chen said retailers and restaurants had reaped a noticeable increase in turnover from their Mother’s Day sales and believed that they would benefit from the arrival of Chinese tourists later in the year.
Hong and Chen shied away from commenting on the government’s cross-strait policies and economic stimulus package, saying they needed more time to gauge the impact on the economy.
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