Taiwanese manufacturers are expecting a decline in profit in the first half of next year, as inventory adjustments continue amid economic uncertainty and monetary tightening, among other downside risks, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said on Thursday, based on the results of a semi-annual survey of purchasing managers regarding their business outlook.
The business prospect index registered at 38.1, as most firms expect operations to remain in contraction mode through the first half of next year, CIER president Chang Chuang-chang (張傳章) told a seminar in Taipei.
The purchasing managers’ index aims to gauge the health of the manufacturing industry, with values larger than 50 indicating expansion and values lower than the threshold suggesting contraction.
About 43 percent of the responding companies reported inventory-related losses, cash strains and price-cutting pressures this year, while 57 percent retained higher-than-normal inventories and 71 percent had postponed shipments, the survey showed.
About 59 percent had taken steps to motivate customers, it said.
A silver lining is that 68.4 percent of electronics suppliers are expecting an inventory glut to ease toward the end of the second quarter, Chang said.
National Development Council Deputy Minister Kao Shien-quey (高仙桂) told the seminar that the findings are “a light at the end of the tunnel.”
Exporters have seen business slumping in the past few months after COVID-19 stimulus measures began to disappear.
Drastic monetary tightening in advanced nations, China’s severe COVID-19 restrictions and the war in Ukraine have played havoc on global demand for Taiwan-made electronics this year, Kao said.
The employment index is expected to soften in the next six months, compared with the second half of this year, the poll showed.
Manufacturers also have a dim view about profit margins next year, with the profit measure dropping from 37.5 to 36, it showed.
Non-manufacturers should fare better in light of the operation index standing at 51.5, it showed.
A recovery from a downturn induced by virus restrictions should sustain local service providers through next year, CIER researcher Chen Shin-hui (陳馨蕙) said.
Taiwan’s loosening of COVID-19 controls raised the non-manufacturing business index by 9.4 points to 52.4 in the second half of this year, Chen said.
Despite business improvement, service providers said that profit margin is expected to stay in contraction at 47.2 due to mounting operating and personnel costs, the survey showed.
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has secured three construction permits for its plan to build a state-of-the-art A14 wafer fab in Taichung, and is likely to start construction soon, the Central Taiwan Science Park Bureau said yesterday. Speaking with CNA, Wang Chun-chieh (王俊傑), deputy director general of the science park bureau, said the world’s largest contract chipmaker has received three construction permits — one to build a fab to roll out sophisticated chips, another to build a central utility plant to provide water and electricity for the facility and the other to build three office buildings. With the three permits, TSMC
YEAR-END BOOST: The holiday shopping season in the US and Europe, combined with rising demand for AI applications, is expected to drive exports to a new high, the NDC said Taiwan’s business climate monitor improved last month, transitioning from steady growth for the first time in five months, as robust global demand for artificial intelligence (AI) products and new iPhone shipments boosted exports and corporate sales, the National Development Council (NDC) said yesterday. The council uses a five-color system to measure the nation’s economic state, with “green” indicating steady growth, “red” suggesting a boom and “blue” reflecting a recession. “Yellow-red” and “yellow-blue” suggest a transition to a stronger or weaker condition. The total score of the monitor’s composite index rose to 35 points from a revised 31 in August, ending a four-month
RSS