Business sentiment last month declined across sectors and is not expected to improve in light of escalating uncertainty, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The confidence gauge among local manufacturers shed 0.43 points to 84.2, the lowest since May 2020, shrinking for 10 straight months, the Taipei-based think tank said, citing a monthly survey.
“The worst is yet to come, likely in the first half of next year, as downside risks are really very high,” TIER president Chang Chien-yi (張建一) said, citing high inflation in the US, global monetary tightening, geopolitical conflicts and China’s tight COVID-19 controls.
The US and China account for more than 50 percent of Taiwanese exports.
The US Federal Reserve might sound less hawkish, but is likely to press ahead with interest rate hikes until consumer prices come under control at around 2 percent, from 7.7 percent last month, Chang said.
Monetary tightening has chilled consumer spending, as evidenced by tepid sales of technology products, the mainstay of Taiwan’s exports, the economist said.
About 40 percent of electronics and machinery suppliers have a negative view about business in the next six months, as international customers seek to avoid overdependence on Taiwan by diversifying supply sources amid US-China technology competition, TIER said.
What matters most is whether China would continue its “zero-COVID-19” policy that is suffocating economic activity, Chang said.
Taiwan would see medium inflation and low GDP growth next year, supported mainly by domestic demand, as loosened disease controls can allow tourism and hospitality sectors to emerge from the COVID-19 pandemic, TIER economist Gordon Sun (孫明德) said.
Some manufacturing sectors could come out of the woods in the second quarter of next year after active inventory digestion, Sun said.
If China eases its strict COVID-19 curbs, revenge consumption could follow and push up inflation, a scenario that also merits caution, Sun said.
The sentiment reading for service sectors lost 3.65 points to 91.09, as logistics and warehousing operators, and securities houses and insurance companies took a hit from an economic slowdown, TIER said.
By contrast, restaurants, hotels, travel agencies and retailers are looking at business pickup, it said.
The confidence measure for the construction industry dropped 5.24 points to 85.1, as softening property sales weighed on new construction contracts despite the government’s promotion of green public projects, it found.
Private engineering firms and developers generally hold neutral views about business in the coming six months, it said.
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said. At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy. "What really matters is not who pioneers
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
RSS