Fri, Feb 01, 2013 - Page 13 News List

Manufacturing sector remains bearish, TIER says

By Amy Su  /  Staff reporter

The manufacturing sector business climate was allocated a “blue” indicator, implying declining sentiment, for the 10th straight month last month, as the value of production, sales and imports in New Taiwan dollars showed a decline due to the impact of year-on-year appreciation of the local currency, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.

The Taipei-based think tank expects the sector’s business climate for this year to improve to a “yellow-blue” indicator, implying weakness, as the global economy recovers, but several uncertainties remain.

The manufacturing sector’s cyclical movement stood at 9.72 points last month, down 0.07 points from the previous month’s revised 9.79 points, indicating that the overall business climate remained below the threshold for a “yellow-blue” indicator, which is 10.5 points, the institute said in its monthly report.

However, industries which had a “blue” indicator accounted for 65.67 percent of the entire sector last month, down 7.19 percentage points from a month earlier, reflecting a gradual pickup in the global economy, the report said.

UNCERTAINTIES

This year, the institute said the US “fiscal cliff,” a negative effect due to the depreciation of the Japanese yen and vagueness on China’s economic strategy remained the three major uncertainties for sentiment in the manufacturing sector.

These uncertainties may strike down the outlook for companies in the petrochemical industry and the electronic components sector, the report said.

Other manufacturers may see sales and profitability improve this year from last year, but the pace of the recovery would remain slow, the institute said.

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