Sentiment among manufacturers improves for 3rd straight month on AI boom

Taipei, Oct. 25 (CNA) Business sentiment in the local export-oriented manufacturing sector improved for the third consecutive month in September on the back of rising artificial intelligence demand and consumer electronics orders, according to the Taiwan Institute of Economic Research (TIER).

Data compiled by TIER, one of Taiwan's leading economic think tanks, showed the composite index for the manufacturing sector, which gauges business sentiment among local manufacturers, rose 2.52 points from a month earlier to 91.65 in September.

In the services sector, the similar composite index, however, fell 2.88 from a month earlier to 85.23 with the composite for the construction industry rising slightly by 0.80 to 97.35, TIER said.

TIER said Taiwan's exports received a significant boost from electronics components and information and communications device sales, soaring 33.8 percent from a year earlier in September, which made more manufacturers more upbeat about their operations.

However, lingering concerns over trade talks between the United States and China, as well as the sluggish progress of negotiations between Washington and Taipei, prompted many Taiwanese manufacturers to be cautious about their business outlook.

Commenting on the composite index decline in September, the service sector, TIER said a strong showing on the local stock market, with the benchmark Taiex surging 6.55 percent, led the financial-related industries to have an upbeat view about their business.

Despite this, the effect of the "Ghost Month" sent sales in durable goods such as cars, furniture and home appliances lower, TIER said.

Additionally, with the end of the summer vacation, retail and food/beverage sales also moved lower, which compromised the September composite index, TIER added.

In Taiwan, many people avoid buying durable goods during the Ghost Month on the Chinese calendar, which fell between Aug. 23 and Sept. 21 this year, due to local superstitions.

TIER said the local home market continued to consolidate as transactions in September fell 3.5 percent from a month earlier, and forecast that home sales will fall more than 20 percent from a year earlier due to the central bank's selective credit controls and banks' move to tighten lending.

In addition, uncertainty over the domestic economy created by the Trump administration's tariff policies is expected to lead home buyers to stay on the sidelines, TIER said.