Local manufacturers remained bearish about the economy last month in the face of sluggish global demand and a strengthening New Taiwan dollar, which might undermine exporters’ earnings, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The latest survey conducted by the Taipei-based think tank showed that respondents who felt bullish about the current state of the economy fell 5.4 percentage points from a month earlier, while the number of those who were bearish rose 2.6 percentage points.
PEAK SEASON
“Although the global economy continued to recover and demand in emerging countries remained robust, the peak sales season of the manufacturing sector has passed with shipments starting to fall,” TIER president David Hong (洪德生) told a media briefing.
Many Asian countries have raised interest rates to fight inflation following the second round of quantitative easing measures launched by the US Federal Reserve, which has weighed on local manufacturers’ overseas investment, TIER said.
The business climate gauge for the manufacturing sector last month stood at 109.13 points, down 2.84 points from a revised 111.97 points in September, posting its third consecutive month of decline, the survey showed.
“Given the NT dollar’s rise, which is unfavorable to the nation’s exports, and uncertainty over a European and US recovery, downstream companies remained conservative on market demand,” Hong said.
As for the economic outlook over the next six months, 20.2 percent of respondents said they were “optimistic,” down from 22.7 percent in September, 67.5 percent felt “the same,” up from 51.5 percent the previous month, and 12.3 percent felt bearish, down from 25.8 percent, the survey showed.
Chen Miao (陳淼), director of the macroeconomic forecasting center at TIER, said that a cooling Chinese economy and reduced growth momentum in the US and Europe had shaken the confidence of local manufactures in near-term economic prospects.
SERVICE
In a separate survey, TIER said wholesale and retail businesses in the service sectors saw a slight improvement in sentiment last month compared with September as many stores launched anniversary sales.
The tourism sector saw a 15.9 percent jump in arrivals from the previous month, with hotels posting better revenues as the number of Chinese visitors to Taiwan increased 42.11 percent from a month earlier, TIER said.
As for financial businesses, with the TAIEX rising only 0.6 percent last month, the securities sector saw a 50 percent drop in profits. However, a steady economic growth managed to support the financial sector despite the uncertainty over global economic conditions, TIER said.
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