Economic outlook improved: TIER

CAUTIOUS::Despite an improved outlook for the manufacturing and service sectors, an expert said US financial problems remained threats to the economy

By Camaron Kao  /  Staff reporter

Tue, Feb 26, 2013 - Page 13

The outlook for the nation’s manufacturing and service sectors improved for the third consecutive month last month, indicating that the nation’s economy is on track to recovery, a survey by local think tank the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) showed yesterday.

The business climate gauge for the manufacturing sector rose to 98.53 points, hitting its highest level in the 22-month period since March 2011, TIER’s survey showed. That was up 4.08 points from a revised 94.45 points in December last year.

The climate gauge for the service sector also reached a new high since March last year, rising to 96.14 points, up 3.82 from a revised 92.32 in December last year, the survey said.

“The signs of recovery are clear and manufacturers have started to feel more optimistic .... Export growth and stock prices both increased last month,” Gordon Sun (孫明德), director of the institute’s macroeconomic forecasting center, told a media briefing.

However, Sun cautioned that financial problems in the US and depreciation policies undertaken by governments around the world remained threats to the nation’s economy.

“We are paying close attention to the direction taken by the new president of South Korea [Park Geun-hye] regarding the country’s currency policy, as well as the US efforts to find a way to deal with its financial cliff in May,” Sun said, adding that those two factors would have an impact on Taiwan’s economy.

In the survey, 26.8 percent of the manufacturers polled said they were optimistic about business last month, up from 20 percent of those polled in the December survey last year.

Respondents said that they had benefited from the improved economic conditions this year and also from rising consumption in China during the Lunar New Year holidays, said Darson Chiu (邱達生), an associate research fellow at TIER.

Asked about business prospects over the next six months, 45 percent of those surveyed felt bullish, up from 35.9 percent in December last year, because of the upcoming launches of new electronics products and inventory replenishment demand next quarter, Chiu said. Those who felt bearish stood at 8.9 percent last month, down from the 15.9 percent found in December last year.

In the service sector, higher stock prices last month helped the financial industry grow and made consumers more willing to increase their spending, Chiu said.