Business confidence last month picked up among domestic manufacturers and service providers, but the construction and property sectors turned gloomy ahead of the expected enactment of unfavorable legislation, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment reading gained a fractional 0.87 points among local manufacturing sectors, reversing 10 months of a downturn, as most firms are neutral or slightly more optimistic about business prospects, TIER president Chang Chien-yi (張建一) said.
Inventory adjustments could come to an end in the next six months, but it remains to be seen if demand would be replenished afterward, Chang said, adding that end-market demand remains sluggish amid sharp inflation and monetary tightening.
Photo: CNA
The business outlook appears brighter among ASEAN and Indian markets, while it is recouping in China after Beijing eased its COVID-19 controls, TIER said.
The number of manufacturers with negative views about business prospects decreased 4.5 percentage points to 33.9 percent, while companies with positive views gained 7.2 percentage points to 20.9 percent, the institute’s monthly survey found.
Chemical product suppliers have divergent perspectives, with about 50 percent looking at improvement and 40 percent predicting further deterioration, it said, adding that base metal manufacturers are more optimistic.
A majority of electronics and machinery suppliers remained downbeat, but the degree of pessimism subsided somewhat, the institute said.
The global economy could start to recover after hitting a low at some point next year, TIER economist Gordon Sun (孫明德) said.
A breakthrough in the Ukraine war could take place, speeding up the recovery, Sun said.
The sentiment measure among local service providers rose 0.31 points to 91.21, terminating three months of decline, TIER said.
Securities houses, department stores and restaurants reported an increase in sales, thanks to a rebound in the TAIEX, anniversary sales and loosened COVID-19 restrictions, the survey said.
In contrast, shipping and logistics service providers took a hard hit, as recession fears weighed on demand, it said.
The confidence reading dropped 0.24 points to 85.6 among the construction and property sectors, softening for four consecutive months, it said.
The sentiment retreat is related to the ban on transfers of presale house contracts that could clear the legislature after winning approval from the Ministry of the Interior last week, TIER said.
Interest rate hikes have dampened buying interest, which is why housing transactions last month tumbled nearly 30 percent from a year earlier, it said.
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