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 number of Taiwanese working in the US rose to a record high of 137,000 last year, driven largely by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) rapid overseas expansion, according to government data released yesterday. A total of 666,000 Taiwanese nationals were employed abroad last year, an increase of 45,000 from 2023 and the highest level since the COVID-19 pandemic, data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overseas employment had steadily increased between 2009 and 2019, peaking at 739,000, before plunging to 319,000 in 2021 amid US-China trade tensions, global supply chain shifts, reshoring by Taiwanese companies and
Shiina Ito has had fewer Chinese customers at her Tokyo jewelry shop since Beijing issued a travel warning in the wake of a diplomatic spat, but she said she was not concerned. A souring of Tokyo-Beijing relations this month, following remarks by Japanese Prime Minister Sanae Takaichi about Taiwan, has fueled concerns about the impact on the ritzy boutiques, noodle joints and hotels where holidaymakers spend their cash. However, businesses in Tokyo largely shrugged off any anxiety. “Since there are fewer Chinese customers, it’s become a bit easier for Japanese shoppers to visit, so our sales haven’t really dropped,” Ito
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
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