Local manufacturers’ business confidence last month weakened slightly from September with the sentiment gauge shedding 2.22 points to 92.37, the lowest in eight months, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The drop was due to a softening in DRAM, LED and flat-panel display prices, and was the second consecutive monthly decline, the fourth quarter being the high season for consumer technology products, for which local firms supply critical components, the Taipei-based think tank said.
The price decline obscured robust demand for electronics, as well as information and communications technology products, it said.
Old-economy industries saw an increase in orders, but not enough to boost their sentiment, the think tank said.
“The latest survey found some firms grew more optimistic about business outlook, while others turned increasingly gloomy,” TIER president Chang Chien-yi (張建一) told a news conference in Taipei.
The latest report was no surprise, given concern over global trade issues such as the US-China dispute, and that seasonality benefits are about to taper off, but the think tank is upbeat about next year, Chang said.
Sentiment for non-electronics industries fared worse as more than a majority of chemicals, plastics and metal product makers reported softening business, the survey found.
Looking ahead six months, firms with more pessimistic views gained 7.5 percentage points to 28.5 percent, while firms with rosy views rose just 2.3 points to 18.3 percent, the survey found.
Transportation tool makers and machinery suppliers expressed the bleakest views, while steel product makers were divided, TIER said.
Meanwhile, the sentiment reading for service-oriented sector tumbled last month for the third consecutive month to 89.04, the weakest level in three years, the survey reported.
However, within this sector, retailers and securities brokers saw a pickup in business, thanks to anniversary sales promotions at major department store chains, the long Double Ten National Holiday weekend and liquidity-driven rallies on the local bourse, the survey showed.
However, retailers and securities companies were generally cautious about the business climate for the next six months, TIER said.
Telecoms, logistics firms and warehouse operators reported revenue downturns and were therefore less upbeat, it found.
The gauge for the construction industry gained 5.07 points to 103.01 as firms speeded up previously delayed construction projects and recognized related revenues, TIER said.
Property transactions in the nation’s six special municipalities rose nearly 20 percent, helping energize sentiment in the industry, it said.
The institute is cautious about a continued uptrend in the property sector ahead of the Jan. 11 elections, as prospective buyers might stay on the sidelines until political uncertainties settle.
Additional reporting by CNA
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