German companies in Taiwan are optimistic about the nation’s economy this year and beyond, and intend to invest, although a sizeable number took a hit to their profit margins last year, the German Trade Office Taipei said yesterday, citing an annual business confidence survey.
Nearly 60 percent of German companies in Taiwan are positive about the nation’s economic prospects in next three years and 48.5 percent plan to invest in the next two years, the survey found.
The easing of the supply chain crisis underpinned the sentiment pickup, although last year proved challenging, German Trade Office Taipei chief representative and executive director Axel Limberg told a media briefing in Taipei.
Photo: CNA
Limberg said that German investment in Taiwan grew to US$1.55 billion last year, making it Taiwan’s second-largest foreign investor.
That helped explain why German companies here have seen their scale expanding.
The proportion of companies with revenue of more than NT$1 billion increased from 16.1 percent in 2022 to 21.6 percent last year, the office said.
Companies with revenues of between NT$250 million and NT$1 billion climbed to 28.9 percent, it said.
However, revenue expansion failed to go hand-in-hand with earnings before taxes, the office said.
More than 50 percent of companies reported an increase in pretax margins in both 2021 and 2022, but only 29.5 percent managed to boost their earnings last year, it said.
German companies in Taiwan ranked global economic growth and Taiwan’s economic growth as their top concerns, followed by cross-strait relations, the survey showed.
Cross-strait tensions are increasingly seen as a burden and more than one-third of supply chains have been negatively impacted, it said, adding that more firms expect their business to take a hit.
Meanwhile, 64.9 percent of German companies in Taiwan reported difficulty recruiting skilled workers, with technicians and engineers the most frequently mentioned vacancies, the office said.
To address the issue, 74.5 percent of the firms support to the establishment of dual vocational training programs that combine theory and practice at non-university educational facilities, it said.
Dual vocational training is considered a cornerstone of the educational system and economic development in Germany, it added.
This year, 35.4 percent of German companies in Taiwan plan to invest in production facilities, a 10.4 percentage point increase from last year, affirming the rising importance of Taiwan for those businesses, the office said.
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