Business sentiment in the local manufacturing sector improved in November, as an index gauging the market climate stopped a six-month falling streak on the back of solid global demand, the Taiwan Institute of Economic Research (TIER) said on Friday.
Data compiled by TIER, one of the leading think tanks in Taiwan, showed the composite index for the manufacturing sector’s business sentiment rose 1.1 points from a month earlier to 102.44 as global demand stayed robust, in particular in the semiconductor industry, which continued to be in a global supply shortage.
TIER President Chang Chien-yi (張建一) told reporters that Taiwan’s economy has benefited from a strong export performance this year with many manufacturers keen to invest more in their productions, to meet growing demand worldwide.
In early November, TIER raised its forecast of Taiwan’s gross domestic product (GDP) growth to 6.1 percent, an increase of 0.7 percentage points from its estimate made in July.
TIER’s forecast was in line with that of the Directorate General of Budget, Accounting and Statistics, which predicted in late November Taiwan’s GDP will grow 6.09 percent, up 0.21 percentage points from the DGBAS’s previous estimate made in August.
Citing a survey, TIER said 27.6 percent of the respondents in the manufacturing sector thought in November that their businesses would improve over the next six months, up from 23.9 percent in a similar poll conducted in October, while 12.2 percent of them agreed in November that their businesses will deteriorate over the next six months, down from 15 percent in October.
As for the service sector, the composite index also rose 1.52 points from a month earlier to 98.29, marking the fourth consecutive month of an increase, TIER said.
TIER said the improvement in the service sector came after an outbreak of domestically transmitted COVID-19 cases was bought under control, and eased caution toward the disease prompted consumers to dine out and travel around Taiwan.
In addition, a booming equity market also pushed up spending as investors locked in their gains, TIER said. In November, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), rose 386.13 points or 2.27 percent, from a month earlier.
Meanwhile, the composite index for the property industry for November rose 0.22 points from a month earlier to 109.07, reversing a month-on-month decline in October, TIER said.
It added that the latest index in the property market reflected an increase in transactions in residential and commercial property in November.
Last month, transactions of homes, shops and offices in the six largest cities in Taiwan — Taipei, New Taipei, Taoyuan, Taichung, Tainan, and Kaohsiung — rose about 9 percent from a month earlier, according to TIER.
Liu Pei-chen, a TIER economist, said the central bank has come up with the fourth round of selective credit control to rein in high home prices, and it is possible that the tightened measures will prolong the process of negotiations between sellers and buyers, which is expected to create some volatility in the residential property market next year.
Source: Focus Taiwan News Channel