TAIPEI (Taiwan News) – While composite indicators for manufacturing, services, and construction rose in May, business optimism for the second half of the year was weakening, reports said Tuesday (June 25).

The subdued prospects were influenced by doubts about the ability of the AI boom to deliver promised results and about the likelihood of a Chinese economic recovery, according to a study by the Taiwan Institute of Economic Research (TIER).

Business sentiment in the manufacturing sector in May showed a sixth consecutive monthly rise, while services have been improving for three months and construction for two months in a row. TIER said lower inflation during the latter half of the year would benefit all sectors, per Radio Taiwan International (RTI).

Despite the absence of long holidays during the rest of 2024, the interest of the public in travel is still high, according to TIER experts. 

Surging stock prices are also likely to fuel consumption, though housing prices might head into slower growth, as home buyers are likely to stand back and wait to see whether further price increases ate on the horizon, TIER said.