Business sentiment falls across 3 sectors in August: TIER

Taipei, Sept. 24 (CNA) Business sentiment in Taiwan's manufacturing, service and construction sectors fell in August amid persistent geopolitical risks, the Taiwan Institute of Economic Research (TIER) said Thursday.

In its monthly report, the think tank said its manufacturing sentiment indicator fell 0.49 points to 100.73. The service sector indicator dropped 1.19 points to 97.3, while the construction sector indicator fell 1.89 points to 108.34.

The decline in manufacturing sentiment was modest, the report said. Service sector sentiment fell for a second consecutive month, while construction sentiment declined after four months of growth.

Gordon Sun (孫明德), director of TIER's Economic Forecasting Center, said the dip in manufacturing sentiment was driven mainly by rising tensions in the Middle East, rather than calls to slow the development of artificial intelligence (AI).

Those calls have come primarily from software companies seeking stronger protections and regulatory exemptions on cybersecurity grounds, as well as slower capital spending to reduce financial risks, Sun said.

Hardware and cloud service providers have opposed slowing AI development because semiconductor orders depend on the expansion of data centers and growing demand for computing power, he said.

Sun said U.S. President Donald Trump's administration sees AI data centers as a way to attract foreign investment and create jobs. With the United States competing against China in AI, Washington is unlikely to support slowing its development, he added.

Still, Sun said discussions about slowing AI development bear close attention because of the industry's importance to Taiwan.

On construction, TIER economist Liu Pei-chen (劉佩真) said housing market uncertainty is expected to ease after the central bank moderately relaxed restrictions on mortgage and land loans in September.