The business climate gauges for the manufacturing and service sectors both rebounded last month, as companies showed increasing confidence in near-term prospects, providing more evidence that the economy could bottom out in the first quarter, 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 the business climate gauge for the manufacturing sector rising to 89.78 points last month, from a revised 88.58 points in December, ending five consecutive months of declines.
“The rebound was driven by manufacturers’ upbeat sentiment about the near future,” Gordon Sun (孫明德), director of the institute’s macroeconomic forecasting center, told a media briefing.
The survey showed that 45.6 percent of respondents felt bullish about business prospects in the near term, rising from 27.2 percent in the December poll, while those who felt bearish stood at 13.6 percent, down from 34.2 percent, the institute said in a press release.
However, asked about business confidence in the next six months, 48.7 percent of the manufacturers surveyed said they were pessimistic about prospects ahead, compared with 43.9 percent in the December survey, while 12.4 percent said they were optimistic, compared with 17.1 percent in December.
A separate survey conducted by the institute showed that the business climate gauge for the service sector climbed 2.46 points from a month earlier to 90.11 points last month, recording its first increase since May last year, the press release said.
The trend may be an indication that the economy would touch bottom in the first quarter and gradually pick up, Sun said.
However, he cautioned that the Lunar New Year holiday is peak season for the service industry and might have boosted respondents’ sentiment, especially for those in the wholesale and retail industry.
“Overall, it may be more accurate to evaluate the economy’s long-term trend after conducting this month’s survey” and analyzing the combined results of the first two months, Sun said.