The manufacturing sector is expected to see growth over the next six months amid the recovering global economy, a Taipei-based economic think tank said yesterday.
With robust growth in exports and domestic production, local manufacturers last month felt more optimistic toward the economy in the next six months, a survey conducted by the Taiwan Institute of Economic Research (TIER, 台經院) showed.
“Manufacturers viewing the business climate as bullish increased to 43.8 percent last month, up from 42.3 percent in December, while those with a pessimistic outlook decreased to 9.1 percent,” TIER president David Hong (洪德生) told a media briefing.
Hong expected the business climate for the manufacturing sector to improve slightly in the next six months as demand from emerging markets remains strong.
Last month, exports posted a 75.8 percent increase from the same period the previous year, the largest growth since August 1976, amounting to US$21.75 billion in exports, TIER said in a statement.
“We remain optimistic and yet cautious on the economic recovery,” Hong said, adding that it was important to keep an eye on whether local industries have become more competitive as the nation emerges from its economic woes.
Gordon Sun (孫明德), deputy director of the macroeconomic forecasting center at TIER, however, said the government should remain on guard against possible inflation given rising raw material prices worldwide and a worsening labor shortage problem in China.
“The labor crunch has led to increased costs in China, driving up product prices. This means products made in China will become more expensive and that in turn will affect Taiwanese consumer prices,” Sun said.
Meanwhile, market speculation that the yuan is likely to appreciate in the near future would not negatively affect Taiwanese companies, instead the appreciating yuan would have a positive impact on China-bound Taiwanese businesspeople, Sun said.
“Because demand from the US and Europe has yet to fully rebound, the appreciation of the Chinese currency will boost its purchasing power and thereby have a positive impact on Taiwanese exports to China,” he said.
China is facing a dilemma on whether to allow its currency to strengthen, because the move would attract more inflows of speculative investments and possibly spur property and stock market bubbles, Sun said.
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