Taipei: Business sentiment in the local export-oriented manufacturing sector improved for the third consecutive month in September, driven by rising demand for artificial intelligence and consumer electronics orders, according to the Taiwan Institute of Economic Research (TIER).

According to Focus Taiwan, data compiled by TIER, one of Taiwan’s leading economic think tanks, indicated that the composite index for the manufacturing sector, which measures business sentiment among local manufacturers, increased by 2.52 points from the previous month, reaching 91.65 in September.

In contrast, the composite index for the services sector fell by 2.88 points from the previous month to 85.23, while the index for the construction industry experienced a slight rise of 0.80 points to 97.35. TIER noted that Taiwan’s exports saw a significant increase, particularly in electronics components and information and communications devices, with a 33.8 percent rise from a year earlier in September, contributing to the optimistic outlook among manufacturers.

However, ongoing concerns about trade discussions between the United States and China, along with the slow progress of negotiations between Washington and Taipei, have led many Taiwanese manufacturers to maintain a cautious perspective on their business future.

TIER explained that despite the decline in the services sector composite index, the local stock market performed strongly, with the benchmark Taiex surging 6.55 percent. This optimistic performance gave financial-related industries a positive business outlook. Nevertheless, the “Ghost Month” negatively impacted sales in durable goods like cars, furniture, and home appliances.

Additionally, the conclusion of the summer vacation period resulted in decreased retail and food/beverage sales, further affecting the September composite index. In Taiwan, the “Ghost Month” on the Chinese calendar, which occurred from August 23 to September 21 this year, is a period when many avoid purchasing durable goods due to local superstitions.

TIER also reported that the local housing market continued to consolidate, with transactions in September declining by 3.5 percent from the previous month. They forecast a more than 20 percent drop in home sales from a year earlier, attributing this to the central bank’s selective credit controls and banks’ efforts to tighten lending. Additionally, uncertainty surrounding the domestic economy, influenced by the Trump administration’s tariff policies, is expected to cause potential home buyers to adopt a more cautious stance.