This document summarizes the results of a survey of Taiwan businesses that was originally conducted in late 2019 and updated in March 2020 regarding the impact of the COVID-19 pandemic. The survey found that most businesses have substantially lowered their revenue and profit forecasts for 2020 compared to late 2019. The percentage of businesses forecasting increased investment in Taiwan dropped dramatically from over 50% to just 16%. However, optimism about the 5-year outlook remained high, with 46% of businesses still optimistic. Some businesses provided comments noting both short-term negative impacts but optimism about Taiwan's long-term prospects due to its effective pandemic response.

1. Copyright ©2020 Independent Marketing & Research Limited
Taiwan Business Climate Survey 2020
Update as at March 31
Background
The 2020 Taiwan Business Climate study was conducted at the end of 2019 and
published on January 11, 2020. For the full report please click here.
On January 20, Taiwan recorded its first case of the novel coronavirus-
associated pneumonia.
As news of the severity of this disease spread throughout the world,
businesses started to be affected, and consequently, to review their 2020
plans.
At the end of March, we reached out to the respondents to this survey and
asked them to update us in three critical areas: Revenue and Profit forecasts,
changes in Investment levels, and their new 5-year Business Outlook.
The following charts summarise their responses along with the ten-history of
these measures.
We would like to sincerely thank all those who took part for their time,
insights, and comments.
We hope you find the following update summary report of interest and help.
For additional information, please contact us.

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Revenues and Profits: Major decline in growth now forecast
At the end of last year, we saw most businesses forecasting revenue and
profitability growth for 2020. This has now dissipated.
Most of the changes in both revenues and profits were described as
“Substantial”, followed by “Modest”.
71%
59%
69%
63% 61%
54% 56%
52% 50%
56%
26%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revised
Q1,
2020
Forecasting growth in Revenue & Profits

3. Copyright ©2020 Independent Marketing & Research Limited
Revised Investment Forecast for 2020: From majority to
minority
At the end of last year, most companies were planning a slight increase in their
2020 level of investment in Taiwan. This has now changed, dramatically, with
only 16% of companies now forecasting an increase in investment.
0
5
10
15
20
25
30
35
40
45
Substantial
growth in both
Revenues &
Profits
Modest growth
in both
Revenues &
Profits
No change in
Revenues or
Profits
Modest decline
in Revenues &
Profits
Substantial
decline in both
Revenues &
Profits
Major Revenue & Profit classifications (%)
End of 2019 Revised Q1, 2020
54%
43%
52% 48% 50%
43% 45% 48%
39%
51%
16%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revised
Q1,
2020
Forecasting Investment to increase

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Forecast for the next 5 years: Optimism mostly remains
Most businesses (46%) continue to be optimistic about their 5-year outlook.
Slight softening in 5-year outlook.
81%
70%
56% 54%
60%
47% 49% 52% 49% 52%
46%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revised
Q1,
2020
5-Year Business Outlook optimism
0
5
10
15
20
25
30
35
40
45
Optimistic Slightly optimisitic Neutral Slightly pessimistic Pessimistic
Composition of 5-year Business Outlook (%)
End of 2019 Revised Q1, 2020

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Some unprompted comments from Business Leaders: Mostly
positive
“The virus will have a significant impact on our firm's business for the rest of
2020. If "investment" is measured for a service business in terms of FTE
headcount, we hope to avoid layoffs, but likely will be slow this year to replace
people lost through normal attrition. I think our firm will benefit over the longer
term from increased foreign investment into Taiwan. Because Taiwan has not
experienced a public health crisis, Taiwan will benefit earlier than, e.g., China,
from new investment from the United States and Europe as companies in those
places recover from the effects of the virus.”
“This is a temporary setback which will blow over but may have long term
implications due to supply chain AND consumers being hit.”
“Taiwan is doing the best job in the world in responding to the crisis, but the
economy will be unavoidably damaged. I'm optimistic that Taiwan will recover
ahead of other nations.”
“Geopolitical uncertainty (especially worsening relationship with China) will
affect investment and business.”
“No concerns as long as the government reforms its funding policy for
supporting the people and vulnerable patients.”
“The situation and therefore the outlook are still uncertain.”
“Asia-Pacific impact and impact of the world economy on the future of
Taiwanese consumers aren't predictable. The world economy could be in
recession for some time.”
“We are a hospitality company as well as a food and beverage manufacturing
company whose primary business is on-trade customers. Almost all on-trade
businesses in hospitality have seen a 60-70% decrease in revenues, putting a
strain on the entire supply chain.”
“Using the period of the huge decline in customers and revenue for major
renovations of our hotel to at least get ready for upswing once it comes. We
believe Taiwan will be a more attractive destination after receiving more
international attention for the so far successful crisis management. Fingers
crossed.”