The Taiwan Institute of Economic Research (TIER) released its latest monthly report on the state of the economy Thursday.
The report shows that domestic demand, production, and trade all remained high in August. However, external factors including the impact of conflict in the Middle East on the Eurozone, economic adjustment in China, and the impact of higher consumer taxes on Japan’s foreign trade have affected local firms’ views on the state of the economy.
According to the report, the percentage of manufacturers that believe the economy is performing well fell from nearly 31% in July to just under 20% in August. Makers of precision instruments were particularly pessimistic. The business climate index for manufacturing fell almost 2 points from July to August, dropping to 102.61.
In the service sector, the securities, food service, and travel industries all reported negative views on the state of the economy. The business climate index for the service sector fell to 100.83, a drop of just over 3 points from July.
Head of TIER’s economic forecasting center, Gordon Sun, predicts that economic conditions will improve in September.
"I think that short-term fluctuations are inevitable because international economic data aren’t very stable," said Sun. "Figures on the domestic economy have shown a slight decline, but I don’t think we need to worry too much. In August, Apple hadn’t yet announced its new products. As soon as it announced its new products in September, it spurred on domestic manufacturers and drove up their earnings. This slump may be a temporary condition. Of course, we’ll need to keep monitoring international economic conditions."