Business Confidence Survey

Summary: 

1. 2023 Was a Challenging Year for German Companies in Taiwan 

Many German companies operating in Taiwan struggled in 2023. Business satisfaction was significantly lower than in 2022 and nearly half of the companies missed their business targets. Even though a shift in revenues from the middle to the upper end of the scale was recorded, profitability decreased for almost every second German company, which represents a sharp increase on the previous result. However, it is positive to note that supply chain disruptions eased significantly last year. While two-thirds suffered from bottlenecks in supply chains in 2022, this value dropped to around 40 percent in 2023. Of those suffering from bottlenecks, over 50 percent reported only minor costs. 

2. Cross-Strait Tensions, Energy Transition, and Labor Shortage Seen as Rising Challenges 

Even though global and domestic growth remain the biggest concern for German companies, increased cross-strait tensions pose a growing burden on business operations: The supply chains of over one-third have already been negatively affected and at 40 percent, a significantly higher number of companies expect their business operations to be impacted in the future. Improving language skills and fighting labor shortage are domestic issues that the government should address. Two-thirds reported difficulties with finding qualified staff, especially technicians. To counter the existing talent shortage, three quarters of the companies endorse the establishment of a vocational training program. Furthermore, 25 percent see Taiwan’s energy transition as most pressing domestic challenge and 36 percent stated that energy supply and grid resilience should be improved. 

3. Willingness to Invest in Taiwan Remains High 

Taiwan’s relevance for German companies goes beyond its local market. For over 50 percent, Taiwan serves as an important hub for their sales activities in other Asian markets and around 40 percent benefit from investments by their Taiwanese customers abroad. Commitment to Taiwan also remains on a high level. The percentage of companies that intend to invest in Taiwan in the next two years reached a record-high of nearly 50 percent. In line with the shortage of skilled workers, staff development and training remain the top priority for investments. Furthermore, an increase in willingness to invest in production facilities as well as automation and productivity development was recorded.  

4. Positive Outlook for the Upcoming Years 

Confidence in Taiwan’s future development remains high. Only a minority predict Taiwan’s GDP growth to be lower than in 2023, while every second German company expects the economy to improve in 2024. The three-year outlook is even more optimistic, with nearly two-thirds forecasting GDP growth. Compared to last year, German companies are also significantly more optimistic that their turnover, profit, and productivity will develop positively in 2024. 55 percent expect their turnover to increase, 48 percent forecast higher profitability. One-third intend to increase their workforce, and 60 percent assume that their local entity will grow in 2024. 

Report: 

Business Confidence Survey 2023/2024 Report