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
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