Taiwan’s business sentiment strengthened across major sectors last month, signaling a steady improvement in corporate confidence as demand tied to artificial intelligence (AI) and public investment helped offset lingering global uncertainties, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The manufacturing business climate index rose to 94.42, up 2.39 points from October and marking a fifth straight monthly increase, TIER said, citing a monthly survey.
Overall manufacturing conditions improved as demand for AI, high-performance computing and cloud services continued to underpin orders, said Gordon Sun (孫明德), director of TIER’s Economic Forecasting Center.
Photo courtesy of the Taiwan Institute of Economic Research
He cautioned that non-AI industries remain under pressure from weak global demand and intense competition from overseas.
Manufacturers have gradually shaken off tariff-related disruptions and policy uncertainty this quarter, Sun said, adding that optimism for next year is building.
A strong start to the first quarter is possible if external tailwinds materialize, including an end to the Russia-Ukraine war, tighter capacity controls in China and continued easing of US monetary policy.
Looser US policy would help stabilize financial markets and support consumption, while a resolution to the conflict in Ukraine could free up fiscal resources in Europe, restore supplies of Ukrainian raw materials and help normalize Russian oil prices, the economist said.
China’s efforts to curb excess capacity amid rising anti-dumping pressure could lift prices for cement, steel and other materials, benefiting Taiwan’s petrochemical and steel producers, Sun added.
The services sector showed improvement, with its confidence index climbing 3.09 points to 91.18, marking a second consecutive monthly increase, TIER said.
While brokerages were affected by a pullback in the local stock market, trading volumes rebounded and recent changes to Taiwan’s Innovation Board supported underwriting and advisory businesses, it said.
Wholesalers benefited from stronger restocking activity by downstream clients, a weaker New Taiwan dollar and improving overseas demand, TIER said.
Confidence among construction firms remained firmly in expansion territory, with the construction climate index rising 1.12 points to 101.66, extending a
six-month uptrend.
TIER said greater public works-related spending, aimed at meeting a 95 percent year-end execution target, underpinned the gains.
Major transportation projects scheduled to break ground next year — along with continued investment by high-tech manufacturers building new facilities — would help fuel demand for construction and electromechanical engineering services, it said.
In the property market, the fourth quarter is typically a peak buying season, but transactions are likely to remain constrained by tight lending conditions after the central bank recently made clear it does not plan to relax credit controls any time soon, TIER said.
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