Taiwan’s business sentiment improved last month as demand for artificial intelligence (AI) and emerging technologies continued to bolster manufacturing and services sectors, even as weakness in traditional industries persisted, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The manufacturing confidence index edged up for a fourth straight month to 91.37, a modest 0.25-point increase from the previous month.
The soft gain suggests that, despite a mild uptick, producers’ expectations for the next six months are unchanged, the institute said.
Photo: Lee Ya-wen, Taipei Times
“The worst phase of US tariffs appears to be over for local manufacturers judging on the sentiment movements,” TIER Economic Forecasting Center director Gordon Sun (孫明德) said at a news conference in Taipei.
Electronics and machinery equipment suppliers remained key drivers of sentiment, supported by strong global demand for AI, high-performance computing and advanced semiconductor technologies, the institute said.
These trends helped keep utilization rates for leading-edge manufacturing processes and high-end memory capacity at elevated levels, Sun said, adding that orders for chip packaging and testing services also continued to gain traction.
In contrast, recovery in non-AI segments remained sluggish. Demand for automotive components and industrial control systems has yet to show meaningful recovery, the institute said.
Chemical producers faced a particularly challenging environment due to softening global crude prices, excess supply in Asia, intensifying peer competition and planned maintenance shutdowns among downstream clients, it said.
Ongoing price pressure and declining shipments left 40 percent of petrochemical firms pessimistic about their business, it added.
Meanwhile, sentiment among service providers strengthened visibly, pushing the sector’s climate index to 88.42 from 85.53 in the previous month, the TIER said.
Department-store anniversary events, and increased travel and dining activities during the Mid-Autumn Festival, Double Ten National Day and Retrocession Day holidays boosted traffic and consumption, the institute said.
TIER said it expects the momentum to extend into this month on the back of Double 11 Singles’ Day and Black Friday shopping promotions.
On the other hand, the business confidence gauge for construction and related industries rose 1.69 points to 98.62 last month, marking a fifth consecutive monthly increase, the institute said.
Government agencies accelerated work on public infrastructure projects scheduled for completion before year-end, while technology companies sped up factory constructions to meet rising customer demand, TIER’s Taiwan Industry Economics Database director Arisa Liu (劉佩真) said.
The central bank — which is to review selective credit controls next month — is likely to keep property loan restrictions unchanged until at least the first half of next year, as it aims to curb real-estate lending, Liu added.
Against that backdrop, housing transactions are expected to stay weak in the near term, Liu said.
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