Business climate gauges for the manufacturing and service sectors rebounded last month, following the nation’s trade and export orders, showing an upturn resulting from improvements in global economic sentiment, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The latest survey conducted by the Taipei-based institute showed the business climate gauge for the manufacturing sector hitting 99.7 points last month, up 2.32 points from the revised 97.38 points recorded in April, marking the highest level since January 2011.
In the survey, 32.7 percent of manufacturers polled said they were optimistic about their businesses last month, up 3 percentage points from April.
The report also found that 29.3 percent of respondents were pessimistic about their businesses last month, a 0.1 percentage point decrease from April.
In the service sector, the business climate gauge stood at 96.27 points last month, up 3.15 points from 93.12 in April, marking its highest level since March last year and ending a declining trend over the previous three months.
“The global economic environment returned to a more stable footing last month, following disruption caused by the financial crisis in Cyprus, increased tension on the Korean Peninsula and the H7N9 avian flu scare in March and April,” Gordon Sun (孫明德), director of the institute’s economic forecasting center, told a media briefing.
The upturn led to various economic indicators improving last month, leading many manufacturers to be optimistic about the current state of business, Sun added.
When asked about economic prospects over the next six months, 37.3 percent of those surveyed were bearish, up from the 37.8 percent recorded in the April survey, on concerns over economic sentiment in the fourth quarter — a traditionally weak period for the manufacturing sector.
Those who felt bullish about the near future stood at 18.7 percent last month, down 4 percentage points from April.
Facing a planned exit from quantitative easing in the US, Taiwan’s financial markets may be dragged down in the short-term by foreign portfolio investors’ capital outflow, deputy director of the institute’s economic forecasting center Darson Chiu (邱達生) said.
However, the move is likely to boost the US dollar in the long term, further slowing the New Taiwan dollar’s appreciation and helping Taiwan’s exports, Chiu said.