Taipei, Feb. 27 (CNA) Business sentiment in the local manufacturing sector improved in January amid reduced concerns over the COVID-19 pandemic, as many countries started vaccination programs to combat the disease, according to the Taiwan Institute of Economic Research (TIER).

Data compiled by TIER, one of the leading economic think tanks in Taiwan, showed the composite index for the manufacturing sector, which gauges business sentiment among manufacturers, rose 0.41 points from a month earlier to 106.42 in January, the highest in 13 years.

As for the service sector, the index moved higher in January by 1.30 points from a month earlier to 98.02. Bucking the upturn, the index for the local property sector fell 2.23 from a month earlier to 106.73, marking the third consecutive monthly decline.

TIER said the rollout of vaccinations against COVID-19 in many countries has raised hope the disease will be brought under control and that global economic activity will return to normal.

In addition, TIER said the local manufacturing sector received a boost from strong demand ahead of the Lunar New Year holiday in February, seeing shipments increase, while a hike in international crude oil prices also made many old economy industries upbeat.

Commenting on the rise in the manufacturing index for January, Gordon Sun, director of TIER's Economic Forecasting Center, said despite the pandemic, Taiwan's tech sector still posted an increase in shipments on the back of emerging applications and strong demand for devices used in remote work and online learning.

With the fall in confirmed COVID-19 cases, demand for merchandise rolled out by old economy industries is also recovering, Sun said. Both the tech sector and traditional industries have seen their momentum pick up this year, he added.

In terms of the service sector, TIER said, COVID-19 has had a dramatic impact on the local tourism industry and the food and beverage business, but the financial, retail and transportation/warehousing industries have remained active, as a result of which the sector as a whole remains optimistic.

However, the local property sector has been affected by an increase in building material prices and a fall in workforce, TIER said, adding that the industry also entered a traditional slow season, which hurt business sentiment.