Manufacturing Confidence Picks Up, Services Weaken

By Crystal Hsu /
Staff reporter

Business confidence last month picked up among local manufacturers, but weakened at service providers and construction firms in line with an imbalanced recovery, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.

The confidence gauge for Taiwan’s manufacturing sector stood at 98 points, an increase of 0.82 points from the revised 97.18 points the previous month, marking the third consecutive month of growth and the highest in six months, the Taipei-based institute said.

The improvement came after Taiwanese tech firms continued to benefit from strong demand in artificial intelligence (AI) and high-performance computing, leading to increased confidence about business prospects, it said.

Manufacturing confidence picks up, services weaken

Photo: CNA

“It is too early to measure the impact of US President Donald Trump’s trade policy, as he appears unpredictable and inconsistent,” TIER president Chang Chien-yi (張建一) said.

Non-tech firms delivered a slack performance, weighed by reduced working days and softening end-market demand, the institute said.

Trump’s push for tariff hikes is intensifying uncertainty and unease about global trade, it said.

The service sector saw its business climate index fall to 96.23 points, down 1.36 points from the revised 97.59 points a month earlier, ending three consecutive months of uptick, the institute said.

Even though the Lunar New Year holiday bolstered gift-giving, shopping and travel spending, challenges persist for the hospitality sector ahead and service industry players largely remain cautious or pessimistic about their business prospects for the next six months, it said.

The business climate index for the construction industry shrank to 101.82, down 6.63 points from the previous month, reversing a three-month growth streak, the institute said.

The decline was particularly evident in the real-estate sector in the wake of the central bank’s selective credit control, which tightened liquidity and cooled housing transactions, causing property developers to adopt a wait-and-see attitude on launching new projects this year, it said.

The central bank is unlikely to ease its monetary policy this year with inflationary pressure building amid tariff hikes, said Chang, a board director at the central bank.

The construction sector was comparably stable, helped by post-earthquake reconstruction efforts in Chiayi County, the institute said, adding that the industry should receive further support from an increase in environmental friendly construction projects.

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