Manufacturers and service providers last month shed points in business confidence due to annual maintenance inspections and COVID-19 infections, but construction companies remained upbeat amid strong demand for office space, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment gauge for the manufacturing industry was 103.87, down 0.18 points from a month earlier and ending two months of gains, with some steel and machinery makers seeing selling prices slacken and amid annual equipment maintenance, TIER said.
The effect of Russia’s invasion of Ukraine on the world economy and Taiwan should be limited, as they account for only 2 percent of global GDP and are not major consumption markets, TIER economic forecasting center director Gordon Sun (孫明德) said.
Photo: CNA
That probably explains why the US and European nations have so far refrained from intervening militarily, relying instead on economic sanctions against Russia, Sun said.
As long as the war does not spread, it will have little bearing on the global economy, he said.
However, the war would have greater impact on the world’s financial markets, as well as on energy, raw minerals and grain supply, he said.
Russia is an important producer of natural gas, responsible for more than 10 percent of the world’s supply, Sun said, adding that it also accounts for 40 percent of global wheat supply.
It was not surprising that international crude oil prices surged above US$100 a barrel, while global bourses swung wildly, he said.
Russia is the 35th-largest destination for Taiwan’s semiconductor exports and would not pose a serious threat to overall demand, he said.
Furthermore, as Russia is not Taiwan’s main oil or gas supplier, its military actions would not push imported inflation up significantly, although it would add to the pressure, Sun said.
Oil exporters are reportedly planning to release reserves, which would help stabilize international energy prices, he said.
Taiwanese firms are generally optimistic about their business prospects in the next six month, TIER said.
The number of manufacturers with a rosy view gained 4.1 points to 39.6 percent, while pessimistic responses shrank 4.4 points to 8.4 percent, it said.
The sentiment reading for service providers lost 3.03 points to 98.77, terminating five months of rises, the institute said.
Property developers and builders remained upbeat, lifting their confidence measure 1.09 points to 110, encouraged by sustained demand for office space and factory complexes, it said.
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