Taipei-Confidence among Taiwanese manufacturers improved in July, boosted by increases in orders for electronics makers from overseas buyers looking to build up their inventories, the Taiwan Institute of Economic Research (TIER) said Monday.
Data compiled by the TIER, one of the leading think tanks in Taiwan, showed the July composite index for the manufacturing sector rose 2.23 points from a month earlier to 95.30.
TIER President Chang Chien-yi (???) cautioned, however, that despite the increase in the composite index, its rise was capped by lingering concerns over the trade dispute between the United States and China.
Chang said Taiwanese manufacturers appeared more upbeat about the current business climate but seemed relatively pessimistic about market prospects over the next six months.
A TIER survey found that 30.8 percent of polled manufacturers said the business climate improved in July, up from 24.8 percent in a similar survey in June, while 22.5 percent thought the business climate worsened in July, down from 33.3 percent in the June poll.
The July survey also found that 22.0 percent of respondents said the business climate would improve over the next six months, down from 25.3 percent in June, while 23.9 percent expected the business climate to deteriorate during that time, up from 18.4 percent in the June poll.
Chang said domestic demand in Taiwan remained resilient as a growing number of Taiwanese exporters with production bases in China are investing in capacity at home to avoid U.S. tariffs on Chinese made goods.
Global demand, however, is expected to be affected by the escalating global trade war as the U.S. and China imposed more tariffs on each other's goods over the weekend, which could hurt Taiwan's export-oriented economy.
On Friday, hours after China announced new tariffs ranging from 5 percent to 10 percent on US$75 billion in imported U.S. goods, U.S. President Donald Trump responded with a threat to raise tariffs on US$250 billion worth of Chinese goods to 30 percent from 25 percent.
He also threatened 15 percent tariffs on an additional US$300 billion worth of Chinese products rather than the 10 percent originally mentioned.
Despite the rising trade tensions, Chang predicted the two economies will resume trade talks in September.
Meanwhile, the TIER sub-index for the property sector, rose 0.97 from a month earlier to 97.83 in July, posting a gain for the third consecutive month.
The increase, the TIER said, reflected greater home-buying ahead of Ghost Month in the lunar calendar, which started on Aug. 1 and will run through Aug. 29.
In Taiwan, consumers tend not to buy big ticket items such as cars and homes during Ghost Month to avoid bad luck and end up usually either buying these items ahead of schedule or after Ghost Month has passed.
As for the local service sector, the composite index fell for a second consecutive month, edging down 0.30 from a month earlier to 92.05 as volatility in the stock market hurt the willingness of people in Taiwan to invest and spend, the TIER said.
Source: Focus Taiwan News Channel