TAIPEI (Taiwan News) — Taiwan Institute of Economic Research (TIER) reported Taiwan’s manufacturing and construction sectors experienced declines in July, while its service sector saw a slight increase.

According to the think tank’s business climate report published Monday (Aug. 26), the July business climate index for manufacturing declined, dropping to 99 points. After three consecutive months of growth, the construction sector fell by 1.03 points to 111.96 points. However, the service sector index slightly increased to 99.1 points. 

“In terms of Taiwan's foreign trade, driven by the surge in AI applications, demand for information and communications technology (ICT) products remained robust,” TIER said. “However, traditional export categories have yet to stabilize.”

The think tank reported July’s export growth rate contracted from 23.5% in the previous month to 3.1%, while import growth narrowed from 33.9% to 16.2%.

TIER Director Sun Ming-te (孫明德) said while Taiwan's exports have grown, the growth is not widespread but concentrated in certain sectors, per CNA. Export performance was led by AI servers and semiconductor-related sectors, while traditional industries were relatively weak due to overproduction in China and the depreciation of the Japanese yen, he said.

Despite Taiwan's strong export performance to the US in the first seven months of this year, Sun cautioned that if former President Trump wins the upcoming US presidential election, it could lead to unfavorable conditions for Taiwan next year.