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The Taiwanese Economy in March 2021
The global economy is still on the rebound uninterruptedly, despite the fact that many countries are still suffering from and striving to cope with the COVID-19. As a result, Taiwan's exports in goods performed strong in March 2021 thanks to the recovering global demand.
Taiwan's exports in March 2021 increased by 27.09% compared with the same month of 2020 thanks to a strong market demand for ICT parts and components and other merchandises in addition to much lower base effect, the COVID-19 impacts. Regarding imports, Taiwan's imports in March 2021 increased by 26.97% compared with imports in March of 2020; lower base effect would further be the main cause. On the cumulative basis, Taiwan's exports and imports from January 1st till the end of March in 2021 gave a trade surplus as at US$ 14.37 billion or increase by 49.84% y-o-y. Taiwan's consumer price index (CPI) increased by 1.26% in March 2021 compared with the same month of previous year. The core inflation rate excluding prices of the energy and food increased by 1.07% in March 2021. In addition, the wholesale price index (WPI) increased by 4.36% in March 2021 on the year-on-year basis.
As for exchange rate, the NTD went weaker due to the relatively stronger USD. The NTD/USD stood at 28.531 in late March 2021 indicating a 0.79% depreciation. Regarding the interest rate, it remained low and steady in March 2021 due to the continued loose monetary operations by the CBC with respect to the most recent CPI reading; the lowest and highest over-night call rate in March 2021 stood at 0.080% and 0.082% respectively.
Business Outlook
The portion of manufacturing firms who perceived business were better than expected in the target month was 58.2% or increased by 25.9 percentage points 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 10.0% or decreased by 10.0 percentage points than 20.0% perceiving worse business of the previous month. The portion of manufacturing firms who perceived business remained constant in the target month was 31.8% or decreased by 15.9 percentage points compared with 47.7% perceiving constant business in the previous month. Overall, manufacturing firms perceived the business in the target month was rather optimistic compared with the previous month.
In addition, the portion of manufacturers who perceived business would be better in the next six months was 43.5% in the target month or decreased by 9.0 percentage points than 52.5% feeling more optimistic about the future in the previous month. The portion of firms who perceived the economic outlook would be worsening was 6.6% or increased by 2.5 percentage points compared with 4.1% 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 49.9% or increased by 6.5 percentage points compared with 43.4% feeling neutral about the business outlook one month earlier. Overall, manufacturing firms perceived the business in the near future was less optimistic compared with the previous month.
The manufacturing composite indicator for March 2021 adjusted for seasonal factors on moving average, saw a mild downward correction, and from a revision of as 106.12 points in February 2021 moved down somewhat to 105.73 points in March 2021. Figure 1 shows a slight decrease of 0.39 points. However, the current reading is still considered as somewhat promising in business outlook.
The TIER service sector composite indicator for March 2021 adjusted for seasonal factors on moving average saw an upward correlation, and from a revision of as 99.71 points in February 2021 moved up to 100.96 points. Figure 1 shows an increase of 1.25 points, the fourth month of consecutive increase.
In addition, the TIER Construction Sector Composite Indicator for March y 2021 adjusted for the seasonal factors on moving average saw a downward correlation, and from a revision of 109.28 points in February 2021 went down to 106.60 points in March 2021. Figure 1 shows a decrease of 2.68 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::
None.
● 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:
Printing.
● 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:
None.
● 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:
Retail Sales, Restaurants and Hotels, Transportation and Storage.
● 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, Porcelain and Ceramic Products Manufacturing, Telecommunication Services.
● Manufacturers' sentiments that have improved in the March survey and is expected to deteriorate over the next six months include:
None.
● Manufacturers' sentiments that have improved in the March survey and is expected to remain upbeat over the next six months include:
Soft Drink Manufacturing , Prepared Animal Feeds Manufacturing, Textiles Mills, Yarn Spinning Mills, Fabric Mills , Apparel, Clothing Accessories and Other Textile Product Manufacturing, Leather, Fur and Allied Product Manufacturing, Wood and Bamboo Products Manufacturing, Paper Manufacturing, Industrial Chemicals, Petrochemicals Manufacturing, Plastics and Rubber Raw Materials, Man-made Fibers Manufacturing, Petroleum and Coal Products Manufacturing, Non-metallic Mineral Products Manufacturing, Glass and Glass Products Manufacturing, Cement and Cement Products Manufacturing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal Dies, Screw, Nut Manufacturing, Metal Structure and Architectural Components Manufacturing, Machinery and Equipment Manufacturing and Repairing, Cutlery and Tools Manufacturing, Industrial Machinery, Electrical Machinery, Electrical Machinery, Supplies Manufacturing and Repairing, Electric Wires and Cables Manufacturing, Electrical Appliances and Housewares Manufacturing, Electronic Machinery, Audio and Video Electronic Products Manufacturing, Data Storage Media Units Manufacturing and Reproducing, Electronic Parts and Components Manufacturing, Motor Vehicles Manufacturing, Bicycles Manufacturing, Bicycles Parts Manufacturing, Precision Instruments Manufacturing, Education and Entertainment Articles 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:
Food, Slaughtering, Frozen Food Manufacturing, Edible Oil Manufacturing, Flour Milling and Grain Husking , Chemical Products Manufacturing, Rubber Products Manufacturing, Plastic Products Manufacturing, Communications Equipment and Apparatus Manufacturing, Transport Equipment Manufacturing and Repairing, Motor Parts Manufacturing, Motorcycles Manufacturing, Motorcycles Parts Manufacturing, Construction, Basic Civil Structure Construction, Real Estate Investment, Wholesale, Securities.
TIER Forecast (issued on 23rd April, 2021.)
(NT$100 million, Chained (2016) Dollars)
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