The nation’s business cyclical barometers flashed blue for the second straight time last month, signifying a continued economic slowdown, the Council for Economic Planning and Development (CEPD) said yesterday.
“The government’s economic state monitor flashed blue for the second consecutive month in October,” after turning yellow-blue in August, CEPD economic research department director-general Hung Jui-bin (洪瑞彬) told a media briefing.
Hong said that the composite score for the business indicators stood at 12 last month — the same level as in September, signifying tough times ahead with recession forecast to hit the country’s major trade partners.
Most leading trend pointers contributed negatively to the overall index, led by large declines in indices for stock prices, export orders and average monthly overtime in industry and services, the CEPD report showed.
Share prices plummeted 47.5 percent last month, compared with a 31.6 percent drop in September, as investors exit the market and took shelter in times and savings deposits.
The semiconductor book-to-bill ratio narrowed its decline to 5.9 percent, from a drop of 6.6 percent a month earlier, Hong said, adding that the improvement was not a cause for optimism as the index remained in negative territory.
The index of non-agricultural employment gained 1 point last month even though the nation’s unemployment rate rose to 4.37 percent last month from 4.27 percent in September.
PESSIMISM
CEPD analyst Wu Ming-huei (吳明蕙) echoed the pessimistic sentiment, adding that all coincident indicators lost ground, led by the slump in industrial output, real manufacturing sales and real customs-cleared exports.
The latter posed the biggest concern, with exports last month contracting by a seven-year low of 8.3 percent to US$20.81 billion from a year earlier. Shipments to China and Hong Kong fell 19.9 percent to US$7.47 billion year-on-year, while exports to the US decreased 11.4 percent to US$2.57 billion.
Hong and Wu expressed hope that the various government economic stimulus, including the consumer voucher plan, would ease the blow of the financial storm that is evolving into a global economic gloom.
The Cabinet is due to formally introduce a new stimulus package valued at NT$420 billion (US$12.65 billion) that is aimed at raising GDP growth by 1.64 percentage points to meet its growth target of 2.12 percent.
But Chen Miao (陳淼), a researcher at the Taiwan Institute of Economic Research (台經院), voiced doubts that the government would be able to meet its growth target given its poor performance in executing the NT$58.3 billion planned spending to strengthen infrastructure facilities this year.
The special spending program, intended to push up GDP growth by 0.45 percentage points this year, has yet to be completely distributed, let alone get the projects done, Chen said.
He forecast that the economic light would remain blue in the months ahead.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TALENT FACTOR: The nation’s chip sector would be difficult to replace, but to maintain that advantage, Taiwan must retain skilled workers, an academic said A group of experts on Sunday called on Taiwan to strive to maintain its world-leading position in the semiconductor industry, with a US-China chip dispute expected to continue regardless of who becomes the next US president. Tamkang University Graduate Institute of International Affairs and Strategic Studies director Li Da-jung (李大中) said at a Taipei seminar on global semiconductor security that the relationship between the two superpowers would remain confrontational. There appears to be “no turning back” in US-China relations, as US presidential candidates US Vice President Kamala Harris and former US president Donald Trump are both expected to continue Washington’s hawkish stance
RSS