TIER foresees cautious business sentiment

By Amy Su  /  Staff reporter

Tue, Aug 27, 2013 - Page 13

Business sentiment for the nation’s manufacturing sector may remain relatively cautious over the next six months on government plans to raise electricity rates in October and global economic uncertainties, 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 reached 98.4 points last month, up 0.89 points from the revised 97.51 points recorded in June.

In the survey, 31.3 percent of manufacturers polled said they were optimistic about their businesses last month, up 7.4 percentage points from 23.9 percent recorded in June, on the back of economic recovery in the US and the eurozone, as well as improvements in various economic indicators in China last month.

The report also found that 27.8 percent of respondents were pessimistic about their businesses last month, a decrease of 7.5 percentage points from June’s 35.3 percent.

However, asked about economic prospects over the next six months, 20.5 percent of local manufacturers polled last month were bearish, up from the 18 percent recorded in June, while respondents expressing bullish sentiment fell 10.6 percentage points to 23.7 percent, the report said.

“Some respondents remain worried about rising production costs following the government’s plan to raise electricity rates in October,” deputy director of the institute’s economic forecasting center Darson Chiu (邱達生) told a media briefing.

The US Federal Reserve exiting quantitative easing, as well as uncertainties over more sluggish-than-expected exports in major ASEAN countries this year, would also drag down Taiwanese manufacturers’ confidence, Chiu said.

In the service sector, the business climate gauge stood at 95.76 points last month, up 1.31 points from 94.45 in June, with brokerage, hospitality, tourism and transportation showing the strongest outlook over the next three to six months, the institute’s report showed.

For the construction sector, the business climate gauge dropped to 97.39 points last month, from the revised 98.14 points recorded in June, marking its lowest level since November last year, and also its second straight month posting a month-on-month decline, data showed.

The institute said most sellers and buyers maintain a wait-and-see attitude toward the nation’s housing market, as there is a gap in prices and uncertainty about the government’s move to revise the luxury tax levy.