Manufacturing sentiment weakened in June: think tank

Taipei, July 28 (CNA) The local manufacturing sector's outlook on the business climate weakened in June at a time of lingering trade friction between the United States and China, according to the Taiwan Institute of Economic Research (TIER).

In addition, the downbeat mood also reflected slower sales of Internet/communications gadgets, including smartphones and chips in mining devices used for cryptocurrency transactions, TIER said.

TIER, one of the leading think tanks in Taiwan, said the June composite index, which gauges sentiment in the manufacturing sector, fell 0.95 points from a month earlier to 100.52.

The TIER data came after Taiwan's export orders fell 0.1 percent to US$40.31 billion from a year earlier in June, in the wake of weaker demand for electronics and information technology devices made in the country.

TIER said many local manufacturers were concerned that trade tensions between Washington and Beijing will grow worse, creating uncertainty over the pace of global economic recovery.

However, the sub-index for the property development sector ended four months of moving lower by rising 3.95 points from the previous month to 97.95 in June, TIER said, adding that the rebound was caused by the beginning of new home construction, rising demand from power plant renewal, construction of public transportation facilities and water treatment equipment.

Despite that, transactions of residential and commercial property in the six major cities in Taiwan -- Taipei, New Taipei, Taoyuan, Taichung, Hsinchu, Tainan and Kaohsiung --fell 8.2 percent in June, from the previous month, which compromised the sub-index for the property sector to some extent.

Meanwhile, the composite index for the local service sector moved lower by 3.08 points from a month earlier to 94.88 in June as retailers became more cautious about consumption, TIER said.

In contrast, as a result of the booming equity market, in which the benchmark weighted index has remained above the 10,000 point mark for more than a year, the securities sector appeared more upbeat about their business outlook, TIER said.

On Friday, the weighted index on the Taiwan Stock Exchange closed up 65.17 points, or 0.59 percent, at the day's high of 11,075.78.

In addition, 27.9 percent of manufacturers polled in a TIER survey said the business climate improved in June, down from 36.2 percent in a similar poll in May, while 22.6 percent said the business climate deteriorated, up 9.9 percentage points from the May poll.

Asked about the next six months, 26.4 percent of respondents in the manufacturing sector in June said the business climate will improve, down from 30.9 percent in May, while 15.9 percent said the climate will decline, up from 11.1 percent in the May poll, according to TIER.

Source: Focus Taiwan News Channel