Manufacturers' business sentiment improves for 2nd straight month

Taipei, Sept. 26 (CNA) Business sentiment among Taiwan's manufacturers rose for the second consecutive month in August as concerns over U.S. tariff policies eased, according to the Taiwan Institute of Economic Research (TIER).

TIER data showed the composite index for the manufacturing sector gained 1.79 points from July to 88.88 in August. The service sector index also rose, up 1.01 points to 88.64, while the construction sector index rose 2.66 points to 97.41.

Gordon Sun (孫明德), director of TIER's Economic Forecasting Center, said manufacturers had faced pressure earlier this year from U.S. tariffs, a stronger Taiwan dollar and oversupply in China.

However, with the new tariffs taking effect Aug. 7, the local currency weakening and Beijing addressing production gluts, sentiment has improved, Sun said.

A TIER survey found 22.8 percent of manufacturers reported better business in August, up from 17.7 percent in July. Meanwhile, 33.6 percent said operations worsened, down from 37.6 percent.

TIER President Chang Chien-yi (張建一) noted that the central bank recently raised its 2025 GDP growth forecast to 4.55 percent from 3.05 percent, due to strong demand for artificial intelligence applications.

He added that a planned NT$10,000 (US$328) cash handout later this year could further lift GDP growth by 0.4-0.45 percentage points.

Chang said GDP growth of 4.5 percent appeared achievable and that it could even hit 5 percent. However, he warned that growth remains uneven, with traditional industries lagging behind the tech sector.

Regarding tariffs, Chang said local manufacturers will be able to plan future investments with certainty only when Taiwan and the United States finalize a deal to lower the current 20 percent levy.

In addition, TIER's composite index for the construction industry also rose 2.66 from a month earlier to 97.41 in August.

However, TIER researcher Liu Pei-chen (劉佩真) said the domestic property market shows no signs of apparent recovery, with transaction volume and home prices likely to decline modestly.