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2017.4.25
Early celebration for the year
TIER adjusts its forecast upward

The Taiwanese Economy in March2017

Global forecasting institutes have mostly adjusted their forecasts for this year's global growth upward. As the Taiwan economy remains export-oriented as much as possible, the heating demand is likely to move up Taiwan's optimistic momentum. As a result, the Taiwan institute of Economic Research (TIER) adjusts its forecast from 1.78% to 2.04% of FDP growth for the year of 2017.
Taiwan's exports in March 2017 increased by 13.2% compared with the same month of 2016. Regarding imports, Taiwan's imports in March 2017 increased by 19.8% compared with imports in March 2016. From January 1st till the end of March, Taiwan's exports and imports gave a trade surplus of US$ 10.79 billion or a decrease by 11.85% on a y-o-y basis.
Taiwan's consumer price index (CPI) went up by 0.18% in March 2017 compared with the same month of previous year. The current inflation rate has gradually moved back up compared with previous months. The core inflation rate stood at a relatively more heated ratio as 0.95% in March, 2017. In addition, the wholesale price index (WPI) increased by 1.84% in March 2017 on the year-on-year basis.
As for exchange rate, the NTD went somewhat stronger due to the relatively weaker USD as well as flowing-in capital in March 2017. The USD/NTD stood at 30.336 in late March 2017 indicating a 1.02% appreciation. Regarding the interest rate, it remained low and steady in March 2017 due to the continued loose monetary operations by the CBC with respect to the most recent CPI reading.

Business Outlook

The portion of manufacturing firms who perceived business were better than expected in the target month was 49% or increased by 28.1% compared with respondents who perceiving better business in the previous month. The portion of those perceived business were getting worse in the target month was 14.5% or decreased by 12.9 percentage points than 27.4% perceiving worse business of the previous month. The portion of manufacturing firms who perceived business remained constant in the target month was 36.6% or decreased by 1.5 percentage points compared with 51.6% perceiving constant business in the previous month. Overall, manufacturing firms perceived the business in the target month was somewhat optimistic.
In addition, the portion of manufacturers who perceived business would be better in the next six months was 30.7% in the target month or decreased by 11.5 percentage points than 42.2% feeling more optimistic about the future in the previous month. The portion of firms who perceived the economic outlook would be worsening was 14.8% or increased by 6.8 percentage points compared with 8.0% feeling rather pessimistic about the future in the previous month. The portion of manufacturing firms who perceived business remained constant in the next six months stood at 54.6% or increased by 4.7 percentage points compared with 49.9% feeling neutral about the business outlook one month earlier. Overall, manufacturing firms perceived the business in the near future was neutral to somewhat pessimistic.
The manufacturing composite indicator for March, 2017 adjusted for seasonal factors on moving average, saw an upward correction, and from a revision of as 98.20 points in February moved up to 98.29 points. Figure 1 shows an increase of 0.09 points.
The TIER service sector composite indicator for March 2017 adjusted for seasonal factors on moving average also saw an upward correction and from a revision of 90.25 points in February went up to 91.93 points. Figure 1 shows an increase of 1.68 points.
In addition, the TIER Construction Sector Composite Indicator for March 2017 adjusted for seasonal factors on moving average saw a downward correction, and from a revision of 981.40 points in February went down to 89.80 points. Figure 1 shows a decrease of 1.60 points.

Forecast on Individual Industries

Following are manufacturers' sentiments that are industry-specific in the monthly TIER surveys:

● Manufacturers' sentiments that have been in decline in the March survey and are expected to deteriorate over the next six months include:
Leather, Fur and Allied Product Manufacturing
 
● Manufacturers' sentiments that have been in decline in the March survey, but are expected to improve over the next six months include:
None.
 
● Manufacturers' sentiments that have been in decline in the March survey and are expected to remain sluggish over the next six months include:
Frozen Food Manufacturing, Yarn Spinning Mills, Electrical Appliances and Housewares Manufacturing, Restaurants and hotels, Securities.
 
● Manufacturers surveyed who felt the March outlook was the same as the previous month, but the outlook is expected to exacerbate over the next six months include:
Printing, Petroleum and Coal Products Manufacturing.
 
● Manufacturers surveyed who felt the March outlook was the same as the previous month, but the outlook is expected to improve over the next six months include:
Machinery and Equipment Manufacturing and Repairing, Electronic Machinery, Communications Equipment and Apparatus Manufacturing, Electronic Parts and Components Manufacturing.
 
● Manufacturers surveyed who felt the March outlook was the same as the previous month and the trend is expected to continue for the next six months include:
Manufacturing, Food, Textiles Mills, Wood and Bamboo Products Manufacturing, Industrial Chemicals, Petrochemicals Manufacturing, Man-made Fibers Manufacturing, Industrial Machinery, Electrical Machinery, Construction, Basic civil structure construction, Telecommunication services, Transportation and storage.
 
● Manufacturers' sentiments that have improved in the March survey and is expected to deteriorate over the next six months include:
Rubber Products Manufacturing, Plastic Products Manufacturing, Porcelain and Ceramic Products Manufacturing, Glass and Glass Products Manufacturing, Data Storage Media Units Manufacturing and Reproducing.
 
● Manufacturers' sentiments that have improved in the March survey and is expected to remain upbeat over the next six months include:
Fabric Mills , Paper Manufacturing, Non-metallic Mineral Products Manufacturing, Cement and Cement Products Manufacturing, Cutlery and tools Manufacturing, Electric Wires and Cables Manufacturing, Motorcycles Manufacturing, Motorcycles Parts Manufacturing, Bicycles Parts Manufacturing, Precision Instruments Manufacturing, Banks, Insurance.
 
● Manufacturers' sentiments that have improved in the March survey and the trend is expected to continue for the next six months include:
Slaughtering, Edible Oil Manufacturing, Flour Milling and Grain Husking , Soft Drink Manufacturing , Prepared Animal Feeds Manufacturing, Apparel, Clothing Accessories and Other Textile Product Manufacturing , Plastics and rubber raw materials, Chemical Products Manufacturing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal dies, Screw, Nut Manufacturing, Metal Structure and Architectural Components Manufacturing, Electrical Machinery, Supplies Manufacturing and Repairing, Audio and Video Electronic Products Manufacturing, Transport Equipment Manufacturing and Repairing, Motor Vehicles Manufacturing, Motor Parts Manufacturing, Bicycles Manufacturing, Education and Entertainment Articles Manufacturing, Real estate investment, Retail sales, Wholesale.


TIER Forecast (issued on 25th April, 2017.)
(NT$100 million, Chained (2011) Dollars)

 

 

 
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