The Taiwanese Economy in November 2024

The global economy continues to demonstrate moderate growth. While U.S. manufacturing shows signs of improvement, it remains in contractionary territory. In contrast, manufacturing activities in China and ASEAN regions have shown broad-based recovery. However, uncertainties surrounding U.S.-China trade policies continue to pose significant risks to global economic prospects.
On the domestic front, the Composite Indicators registered an upturn in November, primarily driven by improved business sentiment among manufacturers regarding the current economic outlook. While the ICT sector maintains robust production momentum, traditional manufacturing and export performance have also shown improvement. However, with the impending Trump administration transition, heightened global political and economic uncertainties have led to a slight deterioration in manufacturers' next six-month outlook compared to previous surveys.
The service industry benefited significantly from the Double 11 shopping festival, department store anniversary sales, and major sporting events, which substantially boosted retail and food service demand. Furthermore, the New Taiwan Dollar's depreciation against the USD in November, coupled with growing insurance demand, contributed to steady premium income growth, fostering positive business sentiment in both retail and insurance sectors.
The construction sector's index continued its upward trajectory in November. Civil engineering benefited from the smooth implementation of government infrastructure projects and the year-end construction surge. With the 2025 public construction budget exceeding 2024 levels, coupled with increasing demand from high-tech facility construction and green engineering projects, the sector maintains a positive outlook. In real estate, while the six major cities recorded a 0.9% monthly increase in property transactions, driven by new housing deliveries and moderate price adjustments from sellers, stringent mortgage review policies from the Central Bank, Financial Supervisory Commission, and commercial banks suggest transaction volumes will remain at subdued levels.
According to the Taiwan Institute of Economic Research (TIER), after model simulations, November 2024 marked the end of a five-month decline in Manufacturing Composite Indicators, while service and construction sectors maintained their upward momentum.
Firstly, in foreign trade, export performance has been notably strong, with November showing a year-over-year growth of 9.69%, up from October's 8.40%. This improvement was driven by sustained artificial intelligence and technology product demand, alongside a broader recovery in traditional exports. Import growth surged to 19.82% year-over-year from the previous month's 6.00%, reflecting robust demand for integrated circuits and ICT products within the AI supply chain, alongside continued recovery in semiconductor equipment purchases. Capital equipment and industrial raw material imports maintained high growth rates, while consumer goods imports turned positive, contributing to overall import expansion. For January-November 2024, exports grew 9.93% year-over-year, while imports rose 10.56%, resulting in a trade surplus of USD 74.53 billion, representing a 7.03% increase.
November manufacturing production index reached 102.69, showing a month-on-month increase of 2.19% and a year-over-year growth of 10.73%. In the ICT sector, production momentum remained strong, driven by sustained demand for artificial intelligence, high-performance computing, and cloud data services. In traditional industries, the machinery equipment sector grew 7.96% year-over-year and basic metals increased by 1.72%, benefiting from strong semiconductor process investments and a low base effect. However, the chemical materials and fertilizer sector contracted by 2.82% due to overseas capacity expansion and maintenance-related production cuts, while the automotive and components sector declined by 9.66% amid inventory adjustments, material shortages, and imported vehicle competition. Overall, January-November 2024 industrial production grew by 10.64% year-over-year, with manufacturing rising by 11.07%.
Furthermore, retail sales reached a record TWD 438.1 billion in November, achieving a 6.61% month-on-month increase and 1.83% year-over-year growth. This performance was driven by anniversary sales, Double 11 promotions, Black Friday events, and World Baseball Classic victory-related promotional activities, alongside new store openings and product launches. January-November retail sales grew 2.55% year-over-year, with general merchandise retail increasing by 4.40%. The food service sector recorded TWD 85.4 billion in November revenues, growing 7.18% year-over-year, boosted by seasonal promotions and new product launches. Cumulative January-November food service revenues increased by 3.42% year-over-year.
In the labor market, the unemployment rate in November 2024 decreased to 3.36%, down 0.04 percentage points month-on-month but up 0.02 percentage points year-over-year due to increased first-time job seekers. The January-November 2024 average unemployment rate was 3.39%, down 0.10 percentage points from the same period last year. Regarding wages, October 2024 total earnings for full-time domestic employees averaged TWD 56,418, up 3.91% year-over-year. Real regular earnings for January-October 2024, adjusted for inflation, averaged TWD 45,491, increasing 0.61% year-over-year, while real total earnings grew 2.16% to TWD 60,616.
In the financial market, the overnight interbank rate in November 2024 ranged between 0.816% and 0.825%, averaging 0.821%, down 0.002 percentage points month-on-month but up 0.133 percentage points year-over-year. In the equity market, initial optimism following Trump's election victory drove gains in line with U.S. markets. However, concerns about potential restrictions on high-end chip exports to China and Trump's proposed tariffs led to market declines in the latter half of the month. The Taiwan Weighted Index closed at 22,262.50, down 2.44%, with average daily trading volume of TWD 383.067 billion. The New Taiwan Dollar depreciated 1.31% to close at 32.457 against the USD, influenced by substantial foreign capital outflows from the equity market.

Business Survey Outcomes

The proportion of manufacturing firms that perceived their business as better than expected in October was 24.4%, an increase of 7.0 percentage points compared to 17.4% in the previous month. On the other hand, the proportion of those who perceived their business as worsening in the target month was 19.0%, a decrease of 15.1 percentage points compared to the 34.1% reported in the previous month. Additionally, the proportion of manufacturing firms that perceived their business as remaining constant in the target month was 56.6%, an increase of 8.1 percentage points compared to the 48.5% recorded in the previous month.
Furthermore, in the target month, the segment of manufacturers who anticipated an improvement in their business over the next six months stood at 20.3%, representing a decline of 3.8 percentage points compared to the 24.1% recorded in October. Conversely, the proportion of firms foreseeing a deteriorating economic outlook was 23.6%, marking an increase of 2.6 percentage points from the 21.0% reported one month earlier. Meanwhile, 56.0% of manufacturing firms perceived their business outlook as remaining constant over the next six months, a slight increase from 54.9% in the previous month.
Overall, manufacturers are adopting a cautiously optimistic stance regarding their outlook for the future.
The TIER Manufacturing Composite Indicator for November 2024, adjusted for seasonal factors, experienced a corrective rise. The index reached 95.20 points in November 2024, up 1.77 points from a revised 93.43 points in the previous month, after five consecutive months of decline.
In addition, the TIER Service Sector Composite Indicator for November 2024 exhibited an upward trajectory, rising from a revised value of 91.92 points in the previous month to 93.11 points in the target month, an increase of 1.19 points, marking two consecutive months of growth.
Lastly, the TIER Construction Sector Composite Indicator for November 2024, also adjusted for seasonal factors, stood at 104.75 points, up 1.03 points from 103.72 in the previous month, maintaining an upward trend for the second consecutive month.

Analyses and Outlook of Industries

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

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