Business confidence last month picked up mildly among manufacturers and service providers, remaining soft in property sectors, while economic uncertainty dampened business for almost all, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment gauge for the manufacturing sector gained 1.68 points to 88.18, up for the third straight month, as the number of firms with positive views about business in the next six months gained 10.9 points to 36.1, the Taipei-based think tank’s monthly survey showed.
The number of firms with negative views fell 13.3 points to 16.4, it said.
Photo: CNA
“That the confidence reading rose for three consecutive months suggests that things would improve next quarter and beyond,” TIER Economic Forecasting Center director Gordon Sun (孫明德) said.
However, as global inflationary pressures linger, firms cannot afford to ignore downside risks, he said.
The nation’s economic showings would fluctuate downward in the first half of this year and show signs of improvement thereafter, TIER president Chang Chien-yi (張建一) said.
The manufacturing sector should start to recover in the third quarter, and if the pace of recovery is strong enough, it could more than offset the downturn, Chang said.
There is still room for policymakers to raise interest rates next month to curb inflation, as consumer prices proved higher than expected, said Chang, who is a central bank board member.
The consumer price index last month climbed above 3 percent, Chang said, adding that the reading is quite high for Taiwan.
The Directorate-General of Budget, Accounting and Statistics on Wednesday raised its forecast on inflation to 2.16 percent this year, higher than the central bank’s 2 percent target, and lending support to further monetary tightening, Chang said.
The confidence measure for service providers posted 91.96, rising 1.95 points and reversing five months of decline, TIER said.
Securities firms and insurance companies appear upbeat about business for the next six months, as recent TAIEX rebounds have helped boost investment interest, it said.
Retailers, banks, restaurants and hotels are looking at flat operation due to a slow season, it said.
Transportation and logistics service operators remain conservative amid a global slowdown, it added.
The confidence reading among construction firms and real-estate brokers dropped 0.77 points to 91.5, as property transactions plunged 38.4 percent in the nation’s major cities.
The retreat was due to interest rate hikes and fewer working days, TIER said, noting that people usually spend the Lunar New Year visiting family or traveling abroad.
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