TAIPEI: Taiwan's business mood turned a little more effervescent in April, as the corporate community took heart with the expectation of further government stimulus measures and an encouraging flow of orders from emerging markets, according to a survey by the Taiwan Institute of Economic Research (TIER).

Releasing its monthly business climate indicators at a press briefing yesterday, the local think tank disclosed that 42.4 percent of the companies it polled expressed optimism about their business prospects for the next six months. That's an increase from the March figure of 41.4 percent.

Equally as enlightening, companies seeing only gloomy prospects for the next six months decreased from 20.7 percent of companies surveyed in March to 16.7 percent in April. Those with neutral expectations increased from 37.9 percent to 40.9 percent.

However, when asked about prevailing conditions in April, companies appeared more cautious than in March. The percentage of companies assessing their April positioning as favorable dropped by 15.3 percent.

Interpreting the survey results, Chen Miao, director of TIER's macroeconomic forecasting center, said some of the polled companies expect the effects of government measures to stimulate domestic demand will reveal themselves gradually.

Meanwhile, demand from emerging markets continues to be strong, especially for electronic equipment, Chen added.

He refused to predict a recovery based upon the survey results. "The numbers didn't give us a clear picture (about the business outlook)," he said.

Also attending the press briefing, TIER president David Hong pointed out that there are many signs that the economy has stabilized after months of deterioration. Consumer confidence in the US and Europe have improved and stimulus packages by individual governments have produced results, he added.

Based on the survey's findings, TIER's manufacturers' outlook index and service providers index in April are 112.54 and 193.26, compared to the revised March figures of 104.97 and 93.48.

According to Taiwan's statistics Agency, the Directorate General of Budget, Accounting and Statistics, the island's economy shrank by an unprecedented 10.24 percent in the fourth quarter last year, the worst single-quarter decline since the official record was opened in 1961. The agency also predicted that the GDP for 2009 will slide by 4.25 percent.

The government has adopted measures including NT$858.5 billion investment on infrastructure, tax cuts, consumer vouchers and low interest rates, in efforts to stimulate the economy.

China Daily/CNA

(HK Edition 05/27/2009 page2)