German companies remain broadly optimistic about Taiwan’s economic outlook despite sentiment that the economy would normalize following the nation’s robust economic expansion last year, a business confidence survey released yesterday by the German Trade Office Taipei showed.
The results point to resilient confidence in Taiwan as a business destination, with bilateral trade rising 6 percent to US$21.7 billion, German Trade Office Taipei Chief Representative and Executive Director Eva Langerbeck said.
Nearly 90 percent of respondents expect Taiwan’s economy to remain stable or improve this year after GDP expanded 8.68 percent last year, she said.
Photo courtesy of German Trade Office Taipei
German firms operating in Taiwan reported solid business performance last year, although overall satisfaction fell to a five-year low. About 52.1 percent of respondents said they were satisfied with their company’s performance.
The relatively subdued sentiment contrasts with strong operating results, as about 65.7 percent of companies said they met or exceeded their business targets, the third-best result in the past eight years.
Almost 41 percent of respondents reported revenue growth, while 40 percent said they achieved higher profit margins and 37.1 percent outperformed their respective markets. The strongest results were recorded in the machinery and electronics sectors.
A global boom in artificial intelligence (AI) has also created opportunities, with about 54.2 percent of firms saying they benefited from the surge, particularly in automation and semiconductor-related activities.
External risks nevertheless remain a major concern. About 61.1 percent of respondents cited global economic growth as the biggest challenge, followed by cross-strait relations and Taiwan’s domestic economic outlook.
Concerns over potential disruptions from tensions across the Taiwan Strait have eased. Only 26.8 percent of respondents said they expect cross-strait tensions to affect their operations.
Trade policies from the US remain another source of pressure. About 75.3 percent of respondents said US tariffs and trade measures have affected their businesses, mainly through weaker demand, and increased planning and cost pressures.
Investment activity among German companies in Taiwan remained largely stable, with half of respondents saying they carried out their investment plans on schedule, mostly unchanged from a year earlier.
However, 11.1 percent reported reducing or halting investments last year, up from the previous year, suggesting growing caution.
Looking ahead, investment appetite appears set to soften further. Only 30.6 percent of companies said they plan new investments in Taiwan over the next two years, while a similar share said they remain undecided.
Despite the uncertainty, long-term commitment to Taiwan remains strong, with about 94.4 percent of respondents saying they have no plans to relocate their investments elsewhere.
Semiconductors and AI were identified as the most promising growth sectors, cited by 94.4 percent of respondents. Energy and resources, as well as aerospace and security, were also seen as areas of opportunity.
The survey was conducted between November last year and January.
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