Fri, Feb 03, 2012 - Page 12 News List

Taiwanese manufacturing to recover slowly: TIER

By Amy Su  /  Staff Reporter

Taiwan’s manufacturing sector will take a longer time to recover amid continued uncertainty caused by the eurozone debt crisis, the latest reading issued by the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) showed yesterday.

The manufacturing sector’s business climate showed a “blue” light for the third straight month last month, implying a decline in sentiment in the sector, the Taipei-based think tank said.

The sector’s cyclical movement stood at 9.14 points last month, down 0.6 points from the previous month’s revised 9.74 points, with 80 percent of manufacturing segments flashing the “blue” light.

Gordon Sun (孫明德), deputy director of the institute’s macroeconomic forecasting center, said last month’s worsening data reflected the nation’s worse-than-expected economic growth in the fourth quarter.

Sun expected Taiwan’s economic growth to bottom out by the end of the first half of the year, in line with economists’ expectations, with momentum in some segments of the electronics industry, such as the electronic components segment, to lead the rebound.

“The recovery of these segments will come earlier than others, as these segments also outpaced others in recovering last year,” Sun told reporters.

On the other hand, traditional industry sectors, as well as those in the essential goods industries, will recover more slowly, Sun said.

Meanwhile, Barclays Capital said it expects the electronics industry to start recovering in the second quarter amid inventory restocking as Thailand’s flood--related disruptions fade and as global production indicators show a turnaround.

The brokerage house also said the nation’s economic momentum would improve modestly in the first half of the year.

However, fiscal measures should be provided to stimulate growth, including relief for electronics exporters, infrastructure spending and measures to boost consumption, Barclays Capital said.

The brokerage house said it would maintain its forecast for Taiwan’s economic growth this year at 3 percent, lower than the 3.91 percent growth forecast by the -Directorate-General of Budget, Accounting and Statistics on Thursday last week.

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