The latest survey on the business climate in the manufacturing and service sectors showed that sentiment turned bearish last month, following three consecutive months of improving conditions, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The business climate gauge for the manufacturing sector fell to 98.09 points last month, down 0.99 points from a revised 99.08 in January, the institute said in its monthly report.
In the survey, 30.4 percent of the manufacturers polled said they were optimistic about business last month, down 16.7 percentage points from those polled in January.
The report showed that 48.6 percent of respondents felt pessimistic about business last month, an increase of 22.6 percentage points from January.
“The nation’s exports did not show strong growth momentum in the first two months, an indication that the pace of recovery in the manufacturing sector remains slow,” Gordon Sun (孫明德), director of the institute’s economic forecasting center, told a media briefing.
However, when asked about business prospects over the next six months, 49.9 percent of those surveyed felt bullish, up from the 45.3 percent recorded in the January survey and marking the highest level in three years.
Those who felt bearish about the near future stood at 8.7 percent last month, down 1 percentage point from January.
The results showed that manufacturers are seeing more upsides for Taiwan’s economy in the second half of this year, compared with the first half, Sun said.
He said the results were also in line with the rise in capital equipment imports seen in the first two months, which indicated that the manufacturing sector boosted investments based on its optimism about the near future.
Although GDP growth this year is likely to be stronger than last year, Sun said growth momentum, as well as the mild inflation, would not be sufficient to prompt the central bank to raise policy rates at a board meeting on Thursday.
Sun added that manufacturers in the optical, fine mechanics and electronics industries were forecast to lead the pace of growth in the second half.
In the service sector, the climate gauge dropped to 94.58 points last month, down 1.68 from 96.26 in January, the report showed.
Compared with the manufacturing sector, employers in the service sector may face more challenges over the near future because the peak first-quarter sales period is coming to an end, the institute said.