Taiwan’s consumer confidence index (CCI) this month rose 0.68 points to 64.38, snapping a nine-month decline, according to a survey by National Central University. The rebound was driven by a sharp 5.15 point rise in sentiment toward stock investment, it said.
Dachrahn Wu (吳大任), head of the university’s Taiwan Economic Development Research Center, attributed the improvement to recent rallies in local stocks, particularly Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), following its major client Nvidia Corp’s approval to resume shipments of its H20 artificial intelligence (AI) chips to China.
Despite the rebound, overall consumer sentiment remained fragile. Confidence in the economic outlook fell 0.46 points to 80.65, its lowest since May 2023, while the employment subindex dropped 0.18 points to 70.53, the survey found.
Photo: CNA
Wu said ongoing uncertainty over the US’ “reciprocal” tariffs on Taiwan could dampen hiring expectations.
“Taiwan’s machinery and tooling sectors are already grappling with foreign exchange losses and sluggish demand,” he said. “If the tariff rate exceeds 20 percent, we may see an uptick in unpaid leave, layoffs and unemployment.”
Meanwhile, Taiwan’s business climate monitor remained in “green” territory for the second consecutive month last month, indicating economic stability. However, its composite score fell to a one-and-a-half-year low, reflecting concerns over rising US tariff risks, the National Development Council (NDC) said in a report yesterday.
The score dropped two points to 29, weighed down by declines in overtime hours and revenue in the wholesale, retail and food service sectors, the NDC said.
Department of Economic Development Deputy Director Chen Mei-chu (陳美菊) attributed the dip primarily to delayed deliveries of imported passenger cars.
“The absence of clear notice regarding Taiwan’s treatment under the upcoming US tariffs has caused businesses to adopt a more cautious approach,” Chen said, referring to Friday’s deadline for the new tariff regime.
With Japan and the EU moving forward with agreements to reduce their tariffs with the US to 15 percent, “Taiwan’s final rate becomes all the more critical,” she added.
Despite this, the broader economic outlook remained resilient. Industrial output, exports and imports of capital goods stayed strong, supported by sustained global demand for AI-driven products, Chen said.
In addition, TSMC’s 2-nanometer chip technology, expected to enter mass production later this year, is anticipated to provide a further boost to exports, she said.
However, non-tech sectors and traditional industries saw weaker shipment momentum, she added.
Overall, the business monitor is expected to remain in green territory for the second half of the year, barring any major external shocks, she said.
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