Manufacturing, service sector business sentiment improves in January

Taipei, Feb. 26 (CNA) Business sentiment in the manufacturing and service sectors improved in January, indicating the economy is picking up faster than expected, the Taiwan Institute of Economic Research (TIER) said Monday.

Data compiled by the TIER, one of the leading economic think tanks in Taiwan, showed the composite index gauging business sentiment in the manufacturing sector rose 0.99 points from a month earlier to 98.05 in January, marking the second consecutive monthly increase.

Confidence also rebounded in services, with the index for the services sector moving higher in January by 0.75 points from a month earlier to 93.97, marking the third consecutive monthly improvement.

Improved manufacturing sentiment in January was mainly due to the gradual reduction of semiconductor supply chain inventories and the expansion of the artificial intelligence (AI) chip market, which pushed up advanced chip manufacturing capacity utilization rates as well as packaging and testing demand.

TIER President Chang Chien-yi (張建一) said that the AI craze is an important factor in driving the rebound of the economy, and it is hoped this wave of AI growth will lead to the expansion of more AI applications and boost the economy.

TIER is upbeat that Taiwan's economic growth rate will exceed 3 percent this year, driven by the manufacturing and service industries. As long as there are no unexpected events in the world this year, the global economy, including Taiwan's, will perform well, Chang added.

In addition, the index for the local property sector rose 0.65 points from a month earlier to 106.49, marking the third consecutive monthly growth. The rise was mainly attributable to a new government scheme to help young people secure mortgages, which has boosted demand for self-use housing at a time of peak home delivery.

In addition, the domestic economic has gradually recovered, with Taiwan's stock market fluctuating at high levels, which provided support to the housing market, according to TIER.

Looking ahead, Liu Pei-chen (劉佩真), a researcher at TIER's Taiwan Industry Economics Database, said that although there is no sign the government will loosen its policy to curb real estate speculation, the outlook for the overall housing market is expected to be positive, given that the young homebuyer support scheme remains in place and there is little chance of interest rate increases this year.

(By Pan Tzu-yu and Evelyn Kao) Endtiem/AW