Business sentiment improved noticeably across sectors last month as local firms gained better order visibility after major economies lifted pandemic-induced lockdowns and enabled a phased return to normalcy, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The confidence gauge for local manufacturers came in at 85.73, an increase of 4.22 points from a month earlier, the monthly survey by the Taipei-based institute showed.
The survey showed that 38.1 percent of companies expect business to pick up in the next six months, a solid increase from 23 percent in April, while those with a dim view of prospects fell from 36.5 percent to 22 percent.
“The uplifting sentiment lent force to expectations that the nation’s economy is bottoming out and would start to recover from next quarter,” TIER research fellow Darson Chiu (邱達生) told a media briefing in Taipei.
As the US and Europe reopen their economies, local firms have reported better order visibility, Chiu said.
While the COVID-19 pandemic would no doubt weigh on sales of consumer electronics, companies are less pessimistic, but would likely remain cautious before the crisis settles, he said.
Last week, the Ministry of Economic Affairs reported that export orders, a critical gauge of actual exports one to three months ahead, for last month grew modestly for a second straight month, backed by demand for electronic components.
Suppliers of auto parts, bicycles and home appliances also expect business to gain traction in the coming six months, but makers of plastic and petrochemical products are not yet out of the woods, the survey showed.
The sentiment reading for service-oriented firms gained 6.87 points to 89.68, as Taiwanese regained confidence in domestic tours, shopping and dining as the outbreak is contained, Chiu said, adding that consumer activity might grow stronger in the coming months with new stimulus measures.
The government is to distribute Triple Stimulus Vouchers of NT$3,000 per person from July 15 to shore up domestic demand.
The confidence measure for the civil engineering and building sectors added 9.99 points to 94.26, ending four months of decline, the survey showed.
Prospective buyers are expected to start searching for homes after staying on the sidelines during the outbreak, the institute said.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS