Sentiment improves in manufacturing sector in February

Manufacturing sector

Manufacturing sector (CNA photo)

Business sentiment in the local manufacturing sector improved in February for the third consecutive month, amid growing optimism that the United States and China will resolve their trade disputes, according to the Taiwan Institute of Economic Research (TIER).

TIER, one of the leading economic think tanks in Taiwan, said a rebound in international crude oil prices also prompted manufacturers to think positively about their operations over the next six months.

The composite index for the manufacturing sector, which measures market sentiment, rose 1.61 points in February from a month earlier to 91.29, recent TIER data showed.

The U.S.' decision to put on hold a plan to impose additional tariffs on goods from China during their current negotiations has spurred optimism among manufacturers about global demand over the next six months, according to TIER president Chang Chien-yi (張健一).

In a recent survey, TIER said, it found that 43.1 percent of manufacturers expect the global market to improve over the next six month, compared with 30.6 percent in a similar poll in January. Only 9.9 percent think the global market climate will worsen, a sharp decline from 18.3 percent in January, TIER said.

The poll found that only 11.5 percent of manufacturers thought the global market climate had improved in February, while in January 31.1 percent had a positive view, TIER said. Citing its polls, the think tank said 47.3 percent of manufacturers thought the global market climate had deteriorated in February, compared with 30.8 percent in January.

TIER said the more downbeat mood in February largely reflected a decline in exports that month, when Taiwan's outbound sales dropped 8.8 percent from a year earlier on weakening global demand.

Meanwhile, TIER said, the sub-index for the local construction industry rose 0.41 in February from the previous month to 94.04, as many property developers were gearing up for the peak sales season in late March.

In the service sector, the composite index fell 0.21 in February from a month earlier to 92.05 after strong buying in January, while the reduced number of working days due to a nine-day Lunar New Year holiday also affected business, TIER said.