Business confidence last month declined as companies fretted about US threats of “reciprocal” tariffs, but breathed a sigh of relief after Washington and Beijing agreed to step back from an all-out trade war, a survey by the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) found yesterday.
Business sentiment among local manufacturers came in at 90.9, a drop of 3.53 points from March to a two-year low and down for three months straight, as firms sought unsuccessfully to make sense of US President Donald Trump’s trade policy.
Trump on April 2 announced heavy “reciprocal” tariffs on US trade partners, including 32 percent on Taiwanese goods, but declared a 90-day pause a week later.
Photo courtesy of TIER
The backdrop explained why only 18.2 percent of manufacturers reported better performance last month, a plunge of 14.4 percentage points from one month earlier, the institute said.
Meanwhile, companies that posted a decline in business soared 12.7 points to 37.4 percent, it said.
Asked about prospects, 22.9 percent expect their business to improve in next six months, rising from 19.4 percent one month earlier, while manufacturers with a pessimistic outlook dropped 3.7 percentage points to 29.2 percent, the survey showed.
The easing in trade tensions between the US and China late last month prompted global companies to take advantage of the 90-day respite and build inventory, despite lingering uncertainty, TIER Economic Forecasting Center director Gordon Sun (孫明德) said.
The Taiwanese economy might still grow 3 percent this year if Trump demonstrates flexibility and softens tariffs on imports from around the world, TIER president Chang Chien-yi (張建一) said.
Chang expressed hope that the US might set a 15 percent tariff on Taiwan’s goods if bilateral trade talks fare well.
The confidence reading on service providers weakened 3.03 points to 85.41, as financial firms and hospitality operators took a hit from the stock rout and the New Taiwan dollar’s sharp appreciation affected the profitability of exporters and life insurers, Sun said.
While private consumption held resilient and lent support to sales of wealth management products, economic uncertainties at home and abroad warranted a cautious approach in doing business generally, the economist said.
The sentiment gauge for construction firms and real-estate brokers slid 2.98 points to 90.38, falling for four consecutive months, TIER’s Taiwan Industry Economics Database researcher Arisa Liu (劉佩真) said.
Liu said the housing market has slowed for a while and might not turn around anytime soon, in light of the central bank’s continued loan restrictions and the US tariff drama.
Nvidia Corp’s plan to expand its presence in Taipei’s Shilin District (士林) would benefit the neighborhood, but is not strong enough to bolster the whole market, Liu said.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
STABLE DEMAND: Delta supplies US clients in the aerospace, defense and machinery segments, and expects second-half sales to be similar to the first half Delta Electronics Inc (台達電) expects its US automation business to remain steady in the second half, with no signs of weakening client demand. With demand from US clients remaining solid, its performance in the second half is expected to be similar to that of the first half, Andy Liu (劉佳容), general manager of the company’s industrial automation business group, said on the sidelines of the Taiwan Automation Intelligence and Robot Show in Taipei on Wednesday. The company earlier reported that revenue from its automation business grew 7 percent year-on-year to NT$27.22 billion (US$889.98 million) in the first half, accounting for 11 percent
RSS