Fri, Feb 25, 2011 - Page 12 News List

Manufacturers see strong demand and remain upbeat: TIER

By Amy Su  /  Staff reporter

The manufacturing sector is upbeat on business sentiment for the next six months, thanks to strong demand from emerging markets and inventory replenishment by downstream vendors, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.

The latest survey conducted by the Taipei-based think tank showed that respondents who felt bullish about business sentiment in the near future were up 3.7 percentage points last month to 46.5 percent, from 42.8 percent in December.

The business climate gauge for the manufacturing sector last month stood at 117.06 points, up 1.37 points from a revised 115.69 points in December, its highest reading since last May’s 118.94 points, the survey showed.

“Although last month is normally a slow month for manufacturers, strong demand from China after the Lunar New Year holiday and lower inventory levels at electronics vendors boosted manufacturers’ confidence,” TIER president David Hong (洪德生) told a media briefing.

However, the debt crisis in Europe and a cooling Chinese economy had increased the uncertainty over demand and had shaken manufacturers’ optimistism, Hong said.

That made 7.9 percent of manufacturers polled view the climate as bearish for the next six months, down from 8.8 percent in December, while those who said business sentiment would remain the same dropped to 45.6 percent from 48.4 percent.

In a separate survey, TIER said wholesale and retail businesses in the service sector saw an improvement in sentiment last month compared with December, as the Lunar New Year holiday drove up demand for wholesale and retail products.

Facing rising raw material and oil prices, the nation faces no immediate danger from inflation as companies can better digest increasing costs, Hong said.

As for financial businesses, the TAIEX rose 1.93 percent with average daily turnover reaching NT$137.6 billion (US$4.62 billion) last month, but the securities sector saw an 18.84 percent fall in profits month-on-month, dragging sentiment down, TIER data showed.

Although companies showed their conservative side in last month’s survey, better cross-strait relations will be positive for financial businesses in the next six months, Hong said.

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