The business climate gauges for the nation’s manufacturing and service sectors both fell last month, indicating that weak sentiment about manufacturing has negatively impacted on the public’s confidence and further dragged down the service sector’s outlook, the Taiwan Institute of Economic Research (台灣經濟研究院) said yesterday.
The latest survey conducted by the Taipei-based think tank showed that the business climate gauge for the manufacturing sector fell to 94.34 points last month, from a revised 95.17 points in August.
“The falling gauge, as well as the recent bad news that some manufacturing firms are resorting to offering employees unpaid leave, reflects that sentiment on the sector remains weak for the near future,” deputy director of the institute’s macroeconomic forecasting center Gordon Sun (孫明德) said by telephone.
Manufacturers who felt bullish about business prospects in the near term remained unchanged at 16.8 percent, while those who felt neutral or bearish stood at 45.5 percent and 34.7 percent respectively, compared with 51.6 percent and 28.5 percent respectively in the previous survey, the institute said in a press release.
A separate survey conducted by the institute showed that the business climate gauge for the service sector dropped 5.24 points from a month earlier to 93.68 points last month, its lowest level since April 2009, the press release said.
The results also showed that the momentum for domestic demand has been dragged down by declining consumer confidence, led by consumers’ pessimistic outlook for the manufacturing sector, Sun said.
“We have to watch carefully if domestic demand will remain weak for the first quarter next year, which should traditionally be a hot season for private consumption,” he added.
However, director of the institute’s macroeconomic forecasting center Chen Miao (陳淼) expected the overall sentiment for both manufacturing and service sectors to remain upbeat for the near future.
“Manufacturers’ conservative outlook for the next three to six months was mainly due to the first quarter next year approaching, which is a weak season for them,” Chen said.
Also, the recent news that some manufacturers have put workers on furlough happened only in individual cases, Chen said.
“It is not fair to stare down the economy just because of these single cases,” he added.
As for the service sector, Chen said that last month’s falling gauge was mainly because of the lackluster performance of the financial industry amid the tumbling stock market, while other industries in this sector remained upbeat.
The TAIEX plummeted 6.67 percent last month, stock exchange data showed.
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