Fewer foreign-owned companies are optimistic about their earnings outlook this year and are voicing growing concerns over the nation’s economic slowdown and political turmoil, a survey by the American Chamber of Commerce (AmCham) in Taipei showed yesterday.
The trade group unveiled the annual business sentiment survey after Taiwan put in a disappointing economic performance last year and may achieve limited improvement this year.
A total of 61 percent of the respondents, mostly chief executives based in Taiwan, cited the threat of an economic slowdown as the major risk facing their operations in the months and years ahead, the survey found.
Concerns over increased political unrest also hit an all-time high of 40 percent, nearly double the 22 percent recorded last year, the survey showed, after disputes between the executive and legislative branches paralyzed the government in October last year, while major bills remain at an impasse.
Although 64 percent of foreign chief executives are expecting an increase in both revenue and profit in the coming year, a slight drop from 66 percent last year, many paint the prospects for growth as “modest,” the survey showed.
A four-year high percentage of respondents, 44 percent, intend to keep their level of investment in Taiwan unchanged this year, while another 41 percent are expecting a mild increase, the survey showed.
New AmCham chairman Thomas Fann said the results of the survey reflect heightened dissatisfaction among firms with bureaucratic obstacles to healthy business operations.
Government bureaucracy, which ranked in third and fourth place last year and in 2012 respectively, climbed to the No. 1 factor that respondents said had the biggest impact on their operations last year, followed by inconsistent interpretations of regulations and changes in local demand, the survey showed.
Other adverse factors included inadequate or outdated laws, differences between local and internationally accepted standards and a lack of transparency, among others, the survey showed.
The trade group urged the government to reduce political turmoil, simplify bureaucracy, to put in place plans to stimulate local demand and ensure consistent applications of regulations to make the country more business-friendly.
Inspite of the adverse factors, 41 percent of the companies surveyed plan to increase their headcount this year, mostly large companies in the legal profession, management consulting, healthcare and human resource consultants, the survey found.
Foreign chief executives generally recognized local employees’ hardworking and trustworthy qualities, but found them wanting in English-language skills, high creativity and initiative, the survey said.
An English-friendly environment also topped the list of things the government could do to make Taiwan a better place to live for foreigners, who generally think it is a safe and easy country to live in, the survey said.