Business sentiment among local manufacturers improved last month as the electronics sector continued to see solid global demand for components used in emerging technologies, the Taiwan Institute of Economic Research (台經院) said yesterday.
The composite index for the manufacturing sector, which gauges business sentiment among local companies, rose 2.44 points month-on-month to 98.83 last month, the high level since July 2018, when the index stood at 101.46, the institute said.
It was the fourth consecutive month in which the index trended higher, it said.
Local makers of electronic components, including semiconductor suppliers, reported a growing number of orders to meet strong demand for new technologies, such as 5G applications and high-performance computing devices, while the peak season effect lent further support to the sector, the institute said.
Ahead of this month’s sanctions imposed by Washington on Huawei Technologies Co (華為), the Chinese company was building up its inventory, which also boosted shipments at Taiwanese suppliers, it said.
With businesses reopening worldwide amid the COVID-19 pandemic, crude oil and raw material prices partially recovered, helping many local old economy exporters and also boosting business sentiment in the manufacturing sector, it added.
The institute’s survey found that 35.3 percent of respondents said that their business improved last month, up from 29.3 percent in July, while 19.0 percent said their business deteriorated, down from 20.5 percent the previous month.
The chemicals, steel, machinery and electronics sectors were more upbeat last month, the survey showed.
The survey also showed that 27.7 percent of respondents believed that their business would improve over the next six months, up from 20.1 percent in July, while 23.8 percent said that their business would deteriorate, down from 24.6 percent the previous month.
Meanwhile, the composite index for the service sector rose 1.24 points month-on-month to 96.21, the fifth consecutive month of growth on the back of a buying spree during the summer, as well as the NT$50 billion (US$1.71 billion) of stimulus vouchers issued by the government, the institute said.
Restaurant operators expressed stronger faith in their business prospects last month, while sentiment among cargo shippers and airlines was also lifted by strong demand, it said.
However, the composite index for the property sector bucked the upturn, falling 0.68 points month-on-month to 106.98, largely due to a slump in activity during Ghost Month, which this year fell between Aug. 19 and Wednesday last week.
Taiwanese are often reluctant to buy big-ticket items such as vehicles and homes during Ghost Month, as it is considered bad luck.
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