Manufacturers Pessimistic About Next 6 Months 台經院:製造業對未來半年景氣 呈悲觀與持平

"The worst is yet to come." That's the message delivered by the latest survey published by the Taiwan Institute of Economic Research, citing factors including China's COVID control measures, and the Russia-Ukraine war could further impact Taiwan's economy.

The U.S. Federal Reserve released the minutes of its meeting at the beginning of this month. The text suggested that it will slow down the pace of interest rate hikes to 0.50 percent in December to reduce the risk of excessive tightening. The voice of Fed doves has increased. The Taiwan Institute of Economic Research says leading indicators of major economies and the manufacturing PMI continued to show a downward trend in October. In terms of domestic manufacturing, due to the impact of inflation and global interest rate hikes, end-user demand is weak as manufacturers continue to wind down inventory. Investment willingness tends to be conservative and manufacturing companies are mostly pessimistic or indifferent about the next six months.

Sun Ming-te, Director, Macroeconomic Forecasting Center, TIER: “I think manufacturers will see better sales in the first quarter of next year as they slowly work through excess inventories. And if inflation slows allowing for more consumer purchasing power and China's COVID restrictions are lifted, the overall business environment should pick back up.”

The economic outlook report from the Organization for Economic Cooperation and Development also shows that the energy shock caused by the Russia-Ukraine war continues to stimulate inflation, and the global economy will further slow down next year.

Chang Chien-yi, President, TIER: “Interest rate hikes should come to an end when the U.S. nominal interest rate exceeds the CPI growth rate. In the future, if China lifts its epidemic restrictions, its production costs will increase and the price of what it sells will go up. This will lead to increased imported inflation in the U.S., which is really worth following.”

The Taipei stock market fluctuated after a small drop in early trading. Although the TAIEX broke through 14,800 points, it fell back after selling pressure came about. TSMC's stock price rose during the session to reach NT$494. Chang believes that Taiwan stocks are mainly linked with U.S. stocks. If the U.S. rate hike slows down, Taiwan's stock market will have the opportunity to continue to rebound. 








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