More local manufacturers feel upbeat on business sentiment in the coming six months, an indication that seasonal demand in the fourth quarter would be strong enough to lead the sector’s expansion, 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 prospects in the near term dropped 3.4 percentage points to 40.8 percent last month, while those who felt neutral or bearish stood at 39.3 percent and 20 percent respectively.
Overall, the business climate gauge for the manufacturing sector climbed to 96.66 points last month, edging up 2.86 points from a revised 93.8 points in June, indicating an optimistic business sentiment overall, the institute said.
“The results reflect that the global demand for consumer electronics made by Taiwanese companies remains strong in the near term,” Chen Miao (陳淼), director of the institute’s macroeconomic forecasting center, told the Taipei Times by telephone yesterday.
A separate survey conducted by the institute and released yesterday showed the business climate gauge for the service sector dropped to 105.32 points last month, down 2.13 points from a revised 107.45 points in June on the slowing tourism sector.
Despite the recent uncertainties in the US and the eurozone, Chen said he expected the global economy to keep its pace of expansion in the second half of the year rather than heading into a double-dip recession. However, he said he had doubts about the US Federal Reserve launching another wave of quantitative easing measures, or QE3, to boost the US economy.
“The US Federal Reserve should not conduct the QE3 hastily as the recent market crash was only an overreaction caused by investors’ panic about the [current global] uncertainties,” Chen said. “The Fed’s pledge to maintain low interest rates until 2013 is also a type of monetary easing.”
Council for Economic Planning and Development Minister Christina Liu (劉憶如) shared Chen’s view that the use of QE3 might further lead the world into deeper inflationary pressures in the long term.
Also, the current record-high gold price has been fully factored into the US’ possible use of QE3, Liu said.
The future trend of the gold price would mainly depend on the range of quantitative easing in the US, Liu said, adding that if the US does not issue many paper bills, the gold price might fall in the future.