The optimism level of Taiwanese businesses has dropped to a seven-quarter low, as factors such as the COVID-19 pandemic, inflationary pressure and supply chain bottlenecks have not yet fully stabilized, business data and analytical insights provider Dun & Bradstreet (D&B) said on Friday.
The business optimism index is 108.1 this quarter, a fall of 18.8 percent from the previous quarter and a decline of 10 percent from a year earlier, marking its lowest level since the first quarter of last year, the US-based firm said in a report, based on a survey conducted from early June to early July.
The index comprises six sub-indices that gauge business sentiment toward sales volume, net profit, selling prices, new orders, inventory levels and workforce size.
Photo: CNA
The latest survey found that optimism levels of Taiwanese businesses for net sales, new orders and net profit were at their lowest in seven quarters.
Compared with the second quarter, all six sub-indices fell with businesses’ optimisim levels for sales volume, selling prices and new orders, declining more than 10 percent each, the survey showed.
“This survey was conducted in the middle of 2022 when the demand for some emerging technology applications in Taiwan continued to increase, the shortage of raw materials in the supply chain was gradually improving and the price of products rose, resulting in double-digit growth in trade in the first half of this year,” D&B said in the report.
“However, as the Russia-Ukraine war is still in a stalemate, it pushes up international energy and food prices and causes global inflationary pressure to rise continuously,” it said.
“As a result, Taiwan’s overall business optimism index dropped significantly in the third quarter,” it added.
While the manufacturing sector’s optimism level dropped to 104.7 from 138.5 in the previous quarter, sentiment in the services sector fared relatively better, with optimism falling to a lesser degree, to 113.4 from 126.4, the survey showed.
Among local industries, the most optimistic were hotels, restaurants and beverage stores in terms of new orders, net profit and retail prices.
Information and communication technology firms were most upbeat regarding sales volumes and staffing, while firms in the transportation industry were more pessimistic about sales volumes, net sales, new orders and workforce size, according to the survey.
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