The Taiwan Institute of Economic Research released a survey on business climate trends in April on May 26. The business climate test points of the three major industries declined across the board. The manufacturing industry fell for three consecutive months, and the service industry and construction industry fell for four consecutive months, indicating that the industry's outlook on the business climate in the second half of the year has become more conservative. The Taiwan Academy of Economics also named 13 major industries with poor prospects for the next six months and called on all walks of life to be more vigilant.
According to a survey by the National Taiwan Institute of Economics, the manufacturing business climate test point was 90.90 points, a sharp decrease of 3.53 points from the previous month, a new low in the past two years; the service industry was 85.41 points, a monthly decrease of 3.03 points, the lowest since the outbreak; the construction industry was 90.38 points, a monthly decrease of 2.98 points, the lowest since the end of 2022. These three indicators fell across the board, reflecting that the industry is full of uncertainty about the economy in the second half of the year.
Zhang Jianyi, president of the Taiwan Academy of Economics, pointed out that the global economic and trade environment is still highly volatile. Although the United States and China have suspended their tariff war for 90 days, and the EU's tariffs on Chinese electric vehicles have been postponed until July, relevant policy variables still put pressure on corporate confidence. He warned, "If the U.S. does not cut interest rates but instead raises them, it will become the biggest risk to the economy." Especially amid severe exchange rate fluctuations, manufacturers' hedging space is limited.
Zhang Jianyi added that when the New Taiwan dollar slowly appreciates in 2021, companies can still adjust their hedging strategies, but the rapid appreciation of the New Taiwan dollar in early May this year has caught some manufacturers off guard. He emphasized that the central bank should maintain a stable pace and avoid excessive panic and rumors in the market.
In this survey, 13 major industries were named as being negative about the economy in the next six months, covering industries such as spinning, paper, chemicals, petrochemicals, man-made fibers, screws and nuts, transportation, automobiles, motorcycles and components, bicycles, wholesale, securities and insurance, etc. Sun Mingde, director of the Prosperity Forecast Center, pointed out that companies are currently in the stage of "cleaning up the battlefield" and are facing dual pressures from trade and currency wars. In particular, the competitive depreciation of exchange rates will lead to price-cutting competition among countries and affect export momentum.
Zhang Jianyi pointed out that the United States is conducting a "232 investigation" on ICT and semiconductors, and the Executive Yuan and TSMC have submitted submissions. He is worried that if the United States eventually imposes high tariffs, it may affect the entire supply chain, triggering a "big reservoir effect" and passing costs downstream, affecting the competitiveness of Taiwan's semiconductors.
