Manufacturing, services sectors on mend in Taiwan, says Institute

TAIPEI - Taiwan’s manufacturing sector is set to pick up steam in the second half of the year as the global economy further stabilises, with both manufacturing and services sectors showed signs of recovery in May, according to the latest economic forecast from the Taiwan Institute of Economic Research.

The Business Composite Index for the manufacturing sector gained 0.13 points to 96.42 from the month before, the first increase since February, while services picked up 0.22 of a point to 97.02. But the construction sector dropped 3.4 points to 77.74.
Sun Ming-te, Director of TIER’s Macroeconomic Forecasting Centee, said that although exports declined 3.83% in May because of weak global oil prices and a higher year-on-year comparison base, Taiwan’s manufacturing output rose 3.53% for the first five months of 2015.
“Another encouraging sign is the continuously improving unemployment rate, which dropped to 3.62% in May,” Sun said. “Low energy costs and mild consumer price increases indicate there is no threat of deflation in sight.”
In addition, double-digit growth in imports of auto parts, machinery and raw materials will provide growth momentum for domestic investment, while increasing retail and food service revenues reflect optimistic private consumption, he added.
Sun expects the global economy to further stabilise with the US breaking free from a first-quarter slump and stimulus policies beginning to show effect in the Eurozone and mainland China.
Citing an opinion poll among local firms, Sun said sectors expected to benefit from improving conditions at home and abroad include banking, bicycle manufacturing, chemicals, electrical products, electronic components, food services and home appliances.
“On a downbeat note, the outlook for the civil engineering, industrial machinery and securities sectors appear less optimistic in the following six months,”  he said. www.taiwantoday.tw (ATI).