Business sentiment among domestic manufacturers and service providers improved last month as the effects of the economic slowdown showed signs of plateauing, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The sentiment gauge for the manufacturing industry reached 89.57 points last month, up 3.57 points from a month earlier, as the US and China sat at the negotiating table and demonstrated a willingness to resolve their differences.
The number of Taiwanese manufacturers with an optimistic outlook for the next six months climbed from 19.9 percent in December last year to 28.1 percent, an increase of 8.2 percentage points, the institute’s monthly report showed.
Firms with a negative outlook fell from 32.9 percent to 18.6 percent, the institute said, adding that most other firms held a neutral outlook about business prospects.
The pickup in sentiment was most evident for suppliers of oil products and electrical machinery, TIER economist Gordon Sun (孫明德) said, attributing the improvement to US-China trade talks and stabilized international crude prices.
“Concerns over trade tensions are lingering, but much eased,” Sun added.
If the trend continues, exports might begin to improve in the second quarter, but firms should remain cautious, he said.
The sentiment measure for local service providers reached 92.4 points, gaining 1.3 points from a month earlier, with restaurants, insurance companies and securities firms faring better, while other companies described business as mediocre, the institute said.
The sentiment reading for the real-estate sector fell to 93.59 points, losing 1.13 points, as firms locked in profits at the end of last year and reserved promotional campaigns for the spring sales season, which is late next month, it said.
Housing transactions increased modestly last month, but brokers worried that the pace might slow in the coming months as sellers grow increasingly inflexible over pricing differences, the institute said.
Separately, Minister of Economic Affairs Shen Jong-chin (沈榮津) yesterday said that the return of Taiwanese businesses has not been affected by US President Donald Trump’s intention to delay tariff hikes on Chinese-made goods set to take effect on Friday.
Amid continuing uncertainty in the trade dispute between Washington and Beijing, Taiwanese companies have been conditioned to think ahead and take precautions, Shen said.
Trump on Sunday tweeted that he would be delaying the Friday deadline for raising tariffs on US$200 billion in Chinese goods from 10 to 20 percent.
While US-China trade talks remain inconclusive, it is too early to gauge the impact on Taiwanese businesses, Shen said.
Taiwanese businesses are still diversifying production to meet customers’ requirements, he said.
Additional reporting by Ted Chen
RESTRUCTURING: Taichung and Taoyuan profited most from local firms moving back high-end manufacturing amid the US-China decoupling of trade ties, the ministry said The government’s “Invest in Taiwan” initiative might this year see NT$627.1 billion (US$21.7 billion) of investment pledges realized, with several firms raising stakes and two dropouts due to customer losses, Minister of Economic Affairs (MOEA) Wang Mei-hua (王美花) said yesterday. Wang made the statement at the monthly meeting of the Third Wednesday Club, a local trade group featuring the top 100 firms of each business sector. Since early last year, the government has launched three programs intended to help local companies grapple with US-China trade rows and the COVID-19 pandemic, mainly through moving production lines back to Taiwan. Thus far, the ministry
JOBS AT RISK? Most Cathay Dragon routes are to be operated by Cathay Pacific or a subsidiary, but it was unclear how Taiwanese workers would be affected Cathay Pacific Airways Ltd (國泰航空) yesterday said it is planning new flight services for Taiwan as it announced a corporate restructuring that included the shutdown of its regional subsidiary, Cathay Dragon (國泰港龍), and could lead to job cuts in Taiwan. Cathay Pacific said the shutdown means that the one round-trip service between Taichung and Hong Kong per day and seven round-trip services between Kaohsiung and Hong Kong operated by Cathay Dragon prior to the COVID-19 pandemic would be terminated. “The parent company is planning a new schedule between Taiwan and Hong Kong,” Cathay Pacific assistant manager for corporate communications Moses Hou (侯恩錫)
OVERHEATED MARKET?: The gauge would be designed to provide more reliable information than private-sector data, and help improve policymaking, the council said The National Development Council (NDC) is considering creating a business climate index on Taiwan’s property market, allowing policymakers to better monitor market movements and intervene if necessary, NDC Minister Kung Ming-hsin (龔明鑫) said yesterday. Kung made the remarks at a meeting of the legislature’s Economic Committee where lawmakers from across party lines voiced concerns about housing price hikes driven by capital repatriation. Kung said that the council is assessing the possibility of creating an index designed to provide more accountable and transparent information than data provided by private-sector market analysts, and could help improve policymaking. The council would compile a report on
STOCK MARKETS TAIEX closes slightly higher The TAIEX closed slightly higher yesterday as market sentiment remained cautious over the Nov. 3 US presidential election. Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was again the anchor stabilizing the broader market, preventing the main board from falling into negative territory at the end of the session, dealers said. The TAIEX closed up 14.88 points, or 0.12 percent, at 12,877.25, on turnover of NT$167.982 billion (US$5.81 billion). TSMC, the most heavily weighted stock on the local market, rose 0.44 percent after fluctuating between NT$451 and NT$456. The semiconductor subindex and the bellwether electronics sector