Fewer US companies in Taiwan are forecasting growth in revenue and profit this year compared with last year on concerns over the tepid global economy and domestic consumption, according to a survey released by the American Chamber of Commerce in Taipei (AmCham) yesterday.
A majority, 54 percent, of the surveyed companies expect an increase in profit and revenue this year, down from 61 percent last year, the annual poll found.
“The change in sentiment mainly reflects concerns over the global economy and China’s slowdown that may affect domestic consumption,” AmCham chairman Daniel Silver told a news conference.
Photo: Lo Chien-yi, Taipei Times
The findings are at variance with the Directorate-General of Budget, Accounting and Statistics’ forecast in late November last year that Taiwan’s GDP growth might reach 2.32 percent this year, twice as fast as 1.06 percent estimated for last year.
The level of new investment is likely to be flat over the coming 12 months from last year, as 44 percent of the respondents said that they would maintain the “status quo” and an equal number plan to increase substantially or slightly their investments, the survey found.
The trade group has about 1,000 members representing more than 500 companies in different sectors.
Outdated laws and inconsistent regulatory interpretations top the list of factors that have negative impact on business operations in Taiwan, followed by government bureaucracy, Silver said.
Difficulty in recruiting talented professionals, currency exchange fluctuations and a lack of policymaking transparency were also cited as obstacles to a business-friendly environment, the survey found.
As for president-elect Tsai Ing-wen’s (蔡英文) proposal to build Taiwan into a technology hub in Asia, AmCham said the nation definitely has the ability to develop into a regional Silicon Valley if it is serious about achieving the ambition.
“The idea is not new, but little has been achieved all those years,” AmCham president Andrea Wu (吳王小珍) said.
The chamber painted a dim view of Taiwan’s economy in its latest long-term business outlook, with only 47 percent of members holding optimistic views, a sharp decline from 60 percent last year.
The sentiment shift is consistent with Taiwan’s sluggish economy in recent years, Silver said.
Consequently, 41 percent of the companies plan to increase hiring this year, a significant retreat from last year when 51 percent increased their headcounts, Silver said.
Deficiencies in the quantity and quality of appropriate personnel continue to be a high risk facing Taiwan-based businesses, the survey results show. It said respondents cited a lack of innovative quality and English-language skills among other shortcomings.
AmCham says membership in the Trans-Pacific Partnership would help Taiwan avoid economic marginalization and benefit companies in the nation.
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