Firms pessimistic about economic climate: TIER

By Helen Ku  /  Staff reporter

Tue, Nov 27, 2012 - Page 13

The business climate gauges for the manufacturing and service sectors dropped last month from the previous month, as firms remained pessimistic about the economy amid global economic uncertainties and rising tensions in the Middle East, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.

The latest survey conducted by the Taipei-based think tank showed that the business climate gauge for the manufacturing sector fell for a second consecutive month to 89.6 points last month, from a revised 90.28 points in September.

In the survey, 19.3 percent of the manufacturers polled last month said they were optimistic about business confidence, down from 19.5 percent in the September survey, while 44.8 percent of respondents said that they were pessimistic, compared with 43.9 percent in the previous month.

“Global political and economic uncertainties have caused domestic firms to remain pessimistic about the economy,” TIER president David Hong (洪德生) told a media briefing.

It is hard to tell whether US President Barack Obama will reach an agreement with the US Congress to solve the “fiscal cliff problem,” Hong said.

Meanwhile, Chinese Vice President Xi Jinping (習近平) has been elected general secretary of the Chinese Communist Party, but he will not hold the position of president until March, which means that the country’s financial and economic policies are not expected to change during the transition period, Hong said.

Asked about business prospects for the next six months, last month’s poll showed that 23.4 percent of respondents felt bullish, up from 13 percent in the September survey, while those who felt bearish stood at 27.9 percent, down from 34.4 percent in September.

Manufacturers of petroleum and coal products, as well as paper, plastic, iron and steel were relatively more optimistic about the economic outlook, while those in printing and precision instruments sectors were pessimistic about the economy.

The TIER said the business climate gauge for the service sector fell to 86.58 points last month, from a revised 88.51 points in September.

Firms in the securities, banking, restaurants and telecommunications sectors were more optimistic about prospects for the next six months, while firms in the wholesaling and retailing sectors maintained a conservative outlook.