Business sentiment among local firms last month diverged as manufacturers expressed confidence concerning their outlook, but service providers and construction firms turned neutral with a conservative tendency, a survey published by the Taiwan Institute of Economic Research (台灣經濟研究院) found.
The sentiment gauge for the manufacturing industry was 101.27 last month, up 0.81 points from a revised 100.46 in September, increasing for six months in a row to the highest level since August 2018.
Manufacturers with positive views about business prospects increased 7.5 percentage points to 25.6 percent, while companies with a negative outlook dropped 3.6 percentage points to 21.3 percent, the monthly survey published yesterday showed.
Photo: Ann Wang, Reuters
Suppliers of chemical and steel products are more optimistic than their peers in other sectors, benefiting from infrastructure construction projects, the institute’s economic forecasting center director Gordon Sun (孫明德) said.
Most manufacturers have neutral views about business in coming months after European countries tightened social distancing and travel restrictions to rein in increasing numbers of COVID-19 infections, it said.
The current quarter is high season for technology products for which local firms supply critical components, but business has been undercut by China’s Huawei Technologies Co’s (華為) inventory stockpiling ahead of an import ban imposed by the US that took effect on Sept. 15.
The sentiment reading for service providers last month fell 0.46 points to 96.8, ending six straight months of upturn, the institute said.
Restaurants and life insurance firms grew increasingly uncertain about the landscape ahead, it found, as large technology firms canceled year-end banquets to curb COVID-19 infection risks.
Hospitality providers expected corporate banquet demand to slump 30 percent this year from last year, although technology firms reported a boom in business from remote working and education, the institute said.
Meanwhile, border controls continue to weigh on hotels that depend heavily on foreign business travelers, it said.
The sentiment score for civil engineering firms, property developers and brokers slipped 0.02 points to 111.17, the survey found, after government agencies voiced concern about property price hikes.
More than 50 percent of builders turned from being sanguine to neutral after the Ministry of the Interior announced plans to crack down on speculation of presale projects and a central bank warning about loose land financing and mortgage operations, the institute said.
The Financial Supervisory Commission on Friday last week lent support, saying that it is to inspect local banks’ real-estate lending businesses.
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