《TAIPEI TIMES》 Local manufacturers slightly less pessimistic: TIER
From left, Taiwan Institute of Economic Research president Chang Chien-yi, director Wu Meng-tao and researcher Arisa Liu hold a news conference in Taipei yesterday. Photo: Lee Ya-wen, Taipei Times
MONTHLY SURVEY: Confidence last month hit its lowest level since February 2009, but the number of firms with a dim business outlook declined 5.6 percentage points
By Crystal Hsu / Staff reporter
Most Taiwanese manufacturers last month expected business to flatten or weaken in the next six months, but they were less pessimistic than a month earlier, the Taiwan Institute of Economic Research （TIER, 台灣經濟研究院） said yesterday.
The mood shift follows an easing in lockdown measures by many nations to allow some economic activity while seeking to contain the COVID-19 pandemic.
The confidence gauge for the manufacturing industry last month was 81.75, down 0.8 points, its lowest level since February 2009 and the fourth consecutive month of declines, the think tank said.
Non-tech sectors continued to take a hit from sluggish demand and a raw material price rout partly induced by governments’ attempts to curb the spread of the virus, TIER president Chang Chien-yi （張建一） said.
The virus has proved to be a mixed blessing for local tech firms, as makers of data centers, servers and laptops reported a boom in business, while companies in mobile device supply chains — mainly smartphones — saw a slowdown, Taipei-based TIER said.
The number of companies with a dim business outlook dropped 5.6 percentage points to 34.9 percent, while those with upbeat outlooks increased 6.7 percentage points to 24.8 percent, the think tank’s monthly survey showed.
The US, the eurozone, Japan and other major economies have gradually lifted shutdown orders, raising hopes that economic activity might slowly return to normal, TIER said.
Some technology analysts have voiced concern that the strong demand for laptops and tablets used for remote working and learning arrangements might result in a supply glut and soften demand during the high season in the second half of the year.
Business sentiment for service-focused sectors increased 0.4 points to 82.37, reversing three straight months of declines, TIER found.
People have lately been feeling more comfortable going out, as there have been no new domestic COVID-19 cases in Taiwan for several weeks, the institute said, adding that crowds have reappeared in popular restaurants and at tourist attractions on weekends.
Securities houses also received a boost from stock rallies last month, it said.
Restaurants, hotels and retailers are looking to benefit from stimulus measures to encourage domestic travel. The government has said that it plans to distribute vouchers in July to shore up domestic demand.
Tourism-related companies are generally conservative about their overall earnings ability, as they have to cut capacity to accommodate social distancing requirements and must make do without foreign travelers, the institute said.
The confidence reading for the real-estate and civil engineering sectors dropped 1.43 points to 84.36, the survey found.
The government is speeding up public works projects, but potential property buyers are holding off on purchases to see how the pandemic pans out, TIER said.
Record-low interest rates and ample liquidity would lend support to the nation’s property market, it added.