Business Confidence Survey Results 2017

Outlook 2018

47.1% felt that the overall economic situation and outlook in Taiwan was improving, while only 7.4% perceived it as worsening. When looking at the their own industry, more than 50% believe that their own industry will improve in 2018. That’s a significant increase the results of last year, where 41% thought that the economy would improve and only 35% thought that their industry would improve.

Business expectations and market evaluation

While last year only 38% of companies achieved or exceeded their business targets, this year’s results saw a major improvement, with 57% of the participants stating that they have achieved or exceeded their business targets. The overall view of German businesses towards Taiwan remains stable and positive. Participants scored highly in the category ‘business friendliness’ in Taiwan. Nearly two thirds consider local authorities as either friendly or very friendly towards their business.

Motivation for market presence 

The most important motives for the presence of German companies in Taiwan were following key accounts (85%), having a presence in Asian markets (80%) and sales potential (79%). Other motives included the ability to adopt products to the local market (76%) and cooperation with local companies (74%) Far less important, however, were lower sourcing/procurement costs, lower production costs, proximity to suppliers and Research & Development. Though the rankings have changed slightly over time, the overall motives for the presence of German companies in Taiwan has remained unchanged over the past years.

Investment plans for the next two years

German companies are very interested in investments in new locations in Taiwan. This year, 38.46% of participants stated that their business operation in Taiwan was planning an investment of any kind at a new location in Taiwan within the next 2 years and 12.31% were considering it. In 2016, only 15.4% of companies had investment plans for the next two years. There are several types of investment that are considered by the participants in the next two years, with Sales & Marketing topping the list at 34%, closely followed by Services at 30%. Other types of investments include Sourcing/Procurement (8%), Production (8%), R&D (5%), Production related engineering (5%), Trading (3), and others (7%). 

Business Challenges

Finding qualified staff remains the top business challenge for the fourth year in a row, being a challenge for 57% of the companies. The lack of visibility of an industrial strategy and increasing labor costs were also seen as challenges. German companies in Taiwan have by far the most difficulties in filling management positions, with two thirds of companies stating that they are having problems finding appropriate personnel. Considering the level of experience, the more experience the position requires, the more difficult it is for German companies to find suitable staff. While 68.8% struggle to fill senior positions requiring more than 8 years of experience, only 26.5% report difficulties with filling entry level positions with university graduates.

Recommendations to help overcome major Challenges

To confront the lack of experience labor, we would suggest Improving education of staff, ease regulations on hiring foreign professionals. With regards to the need for increased communication with the government to establish a more reliable framework for doing business in Taiwan, we suggest the government should communicate planned changes in the legal framework more clearly and include foreign enterprises in the decision finding process. Lastly to improve the visibility of industrial strategy it is crucial that companies are informed about the decision making process and are involved beforehand. This way they have the possibility to plan their investments and tailor its business strategies accordingly.

 

Press release ( English Chinese )

Full Report Business Confidence Survey 2017

Presentation Business Confidence Survey 2017

 

For any questions regarding the Business Confidence Survey, please contact Mr. David Yuan, yuan.david(at)taiwan.ahk.de, Tel.: 02-8758-5805.

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