Manufacturers' business sentiment improves further in August

09/25/2020 06:20 PM
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CNA file photo
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Taipei, Sept. 25 (CNA) Business sentiment among manufacturers in Taiwan improved further in August as the electronics sector continued to see solid global demand for devices used in emerging technologies, the Taiwan Institute of Economic Research (TIER) said Friday.

Citing the results of a survey, TIER, one of the country's leading think tanks, showed that the composite index for the manufacturing sector, which gauges business sentiment among manufacturers, rose 2.44 points from a month earlier to 98.83 in August, a new high since July 2018, when the index stood at 101.46.

It was the fourth consecutive month in which the index trended higher from a month earlier, TIER said.

TIER said local electronics component makers, including semiconductor suppliers, saw their orders growing to meet strong demand for gadgets used in new technologies such as 5G applications and high-performance computing devices, while the peak season effect lent further support to the entire electronics sector.

Moreover, before sanctions imposed by Washington on China's Huawei Technologies Inc. went into effect in mid-September, the Chinese telecom equipment brand was keen to build up its inventory, a move that boosted shipments of Taiwanese suppliers, TIER said.

With businesses reopening worldwide amid the COVID-19 pandemic, crude oil and raw material prices recovered to some extent, helping many local old economy exporters and also boosting business sentiment in the manufacturing sector, TIER added.

The survey found that 35.3 percent of the respondents said their businesses improved in August, up from 29.3 percent in a similar poll conducted in July, while 19.0 percent said their businesses deteriorated, down from 20.5 percent in the previous month.

TIER said the chemical, steel, machinery and electronics sectors turned more upbeat in August.

The survey also showed that 27.7 percent of the respondents said their businesses will improve over the next six months, up from 20.1 percent in a similar poll conducted in July, while 23.8 percent said their businesses deteriorated in August, down from 24.6 percent month-on-month.

Turning to the service sector, the composite index rose 1.24 from a month earlier to 96.21, marking the fifth straight month of growth on a buying spree during the summer vacation, as well as NT$50 billion (US$1.17 billion)-worth of stimulus vouchers issued by the government, TIER said.

According to TIER, restaurant operators expressed stronger faith in their businesses in August, while sentiment among cargo shippers and airlines was lifted by strong demand.

TIER said the composite index for the local property sector bucked the upturn, down 0.68 from a month earlier to 106.98, stopping a three- month rising streak in the wake of the Ghost Month taboo.

In Taiwan, consumers are often reluctant to buy big-ticket items such as cars and homes during Ghost Month on the Lunar calendar in a bid to shun bad luck. This year's Ghost Month fell from Aug. 19-Sept. 16.

(By Pan Tzu-yu and Frances Huang)

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