Business climate gauges picked up last month as local firms prepared for the traditional sales high season, but many gave a flat view for the coming six months, a survey by the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The improvement came as global technology giants are due to launch new-generation products next month, pushing up orders for local firms in their supply chain, the monthly survey found.
“Healthy economic data do not necessarily guarantee strong sales ahead,” TIER economic forecasting center director Gordon Sun (孫明德) told a news conference.
It is not clear whether inventory building is due to strong sales expectations or fears that the ongoing US-China trade war might disrupt shipments, Sun said.
The latter motive could cause a supply glut later in the year if the trade dispute flares up and takes a toll on sales, he said.
Some analysts have voiced concern about the possibility of a boycott of US products by Chinese consumers if US President Donald Trump were to add more tariffs on Chinese imports.
However the tit-for-tat tariffs pan out, they pose major downside risks that local exporters can ill afford to ignore, Sun said.
Still, inventory demand raised the manufacturing business sentiment reading to 101.74 last month, up 1.35 points from June, the survey showed.
Services shared the upbeat sentiment, with the index printing 100.43, an increase of 3.38 points from the June level, it said.
Summer is traditionally the high season for consumer sales, as evidenced by new car sales, which rose above the 40,000-unit mark last month, TIER said.
Likewise, department stores, restaurants, theme parks and other leisure facilities also took advantage of the summer vacation by staging activities to attract customers and boost revenues, it said.
Meanwhile, the construction gauge edged up 0.87 points to 98.51 last month as builders wrapped up work on new residential complexes ahead of Ghost Month, which runs from Aug. 11 to Sept. 9 this year, it said.
Firms in most sectors gave neutral business forecasts, despite the sentiment uptick, the survey said.
Suppliers of electronic parts and components are upbeat about business ahead, and so are stock brokerages and restaurant operators, it showed.
TIER researcher Arisa Liu (劉佩真) warned of a possible brain drain, saying that China would continue to tap talent from Taiwan to build up its own semiconductor industry.
The trade war could give China more incentives to groom its own industry to fend off threats from the US, Liu said.
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