《TAIPEI TIMES》 Manufacturers slightly more optimistic – 焦點

A closed food court is pictured at a department store in Taipei yesterday, after Taiwan on Monday banned all indoor dining due to an increase in domestically transmitted COVID-19 infections.
Photo: Ann Wang, Reuters

2021/05/26 03:00

UP AND DOWN: The manufacturing sector has benefited from demand from overseas clients, but sectors reliant on local business were bracing for a drop in trade, TIER said

By Crystal Hsu / Staff reporter

Business sentiment among local manufacturers improved slightly last month, as tech and non-tech firms were upbeat about business going forward, but textile product makers turned conservative, a Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) survey showed yesterday.

Confidence declined in the service and real-estate sectors, and is bound to drop further this month as the COVID-19 outbreak has escalated, reducing economic activity, the Taipei-based think tank said.

The sentiment gauge for the manufacturing industry last month registered 106.37 — a fractional 0.69 increase from a revised score of 105.68 in March, it said.

It said that 39.6 percent of firms had an optimistic outlook regarding the coming six months, a drop of 3.1 percentage points from a month earlier, while 7.9 percent of firms held a negative view, an increase of 1.2 percentage points, the think tank said.

The remainder were neutral.

Suppliers of electronics, machinery equipment, and steel and chemical products were expecting business to improve in the next six months, but textile product makers forecast a downturn, the think tank said.

The manufacturing sector has benefited from inventory-building demand from clients abroad amid expectations of a global economic recovery from the COVID-19 pandemic, TIER said.

Sectors dependent on domestic demand had a different outlook. The sentiment reading for the service sector stood at 101.47, dropping 1.06 points from a revised 101.47 in March, the institute said.

A majority of retailers, restaurants and telecoms were braced for a decline in business, and their hunch is likely to prove well-founded as authorities on Wednesday last week raised the COVID-19 alert to level 3 nationwide, TIER president Chang Chien-yi (張建一) said.

The drop in customers would wreak havoc on retailers, restaurants, hotels and recreational facilities, Chang said.

Civil engineering firms, and property developers and brokers would also fare poorly after reporting a slight decline in business last month, he said.

The confidence reading for the construction and property sectors dropped a slight 0.59 points to 106.01, declining for a second straight month after policy measures were implemented to cool the property market, the institute said.

Strict social distancing requirements would make it more difficult to find workers for infrastructure and property development projects, Chang said, adding that delays would be inevitable.

Meanwhile, interest in property purchases would slump as people are avoiding going out, TIER said.


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