Business sentiment among local manufacturers last month climbed for the ninth straight month to 106.42, the highest since October 2007, as restocking demand ahead of the Lunar New Year holiday ramped up their business, a survey by the Taiwan Institute of Economic Research (台灣經濟研究院) showed on Thursday.
Many manufacturers described their business as healthy last month and are looking forward to a continued uptick in the coming six months, the institute’s economic forecasting center director Gordon Sun (孫明德) said.
The world is anticipating a recovery in the second half of the year, when a large number of people would have received vaccines to curb the spread of COVID-19, Sun said, adding that recovery expectations have spurred demand for crude oil and raw materials, as evidenced by a surge in steel and other metal product prices.
Manufacturers generally expect business to grow or hold steady in the next six months, with the exception of garment makers, which are looking at a slowdown due to unfavorable seasonality, Sun said.
The sentiment gauge for the service sector also rose to 98.02, adding 1.3 points from the revised 96.72 one month earlier, as insurance and transportation companies reported an upturn in business, the Taipei-based think tank said.
While 60 percent of companies in the tourism and hospitality industries expect business to soften after the end of the winter break, an overwhelming 80 percent of shipping, logistics and securities companies remain upbeat, it said.
The confidence reading for civil engineering and building companies shed 2.3 points to 106.73, weakening for three months in a row, TIER said.
TIER research fellow Arisa Liu (劉佩真) said that public and private constructions slowed due to labor and building material shortages, while selective credit controls also weighed on interest in property purchases.
The housing market would need a few more months to digest the policy shift, Liu said.
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