Taiwan’s business climate monitor last month displayed “yellow-blue” for the first time in 26 months as an economic slowdown worsened — apparently evolving into a recession with no quick resolution, the National Development Council (NDC) said yesterday.
The overall score plunged 6 points to 17, just one point above a “blue” reading — indicating recession — showing that economic challenges loom, the council said.
The monitor has not had a “yellow-blue” reading since July 2020, it said.
“It is hard to tell whether the monitor would turn blue or improve this month, as many subindices are hovering around the borderline,” NDC research director Wu Ming-huei (吳明蕙) told a news conference in Taipei.
“Things are evidently deteriorating and challenges look massive in the next few months,” Wu said.
The council uses a five-color system to indicate the state of the nation’s economy, with “green” meaning steady growth, “red” suggesting a boom and “blue” signaling a recession. Dual colors indicate a shift to a stronger or weaker state.
Wu attributed the slowdown to fast inflation, monetary tightening, and geopolitical conflicts wreaking havoc on global financial markets and consumer demand for Taiwan’s exports, mainly electronics used in smartphones, laptops, data centers, vehicles and Internet of Things applications.
Inventory adjustments had proceeded more slowly and would need a lot more time than previously expected, she said.
Major Taiwanese firms gave conservative guidance for this quarter and expect business to weaken further next year, she said.
The index of leading indicators, which indicate the economic situation for the subsequent six months, shrank 0.92 percent to 96.06, as export orders, share prices, new construction floor space and labor accession rates all had negative cyclical movements, the NDC said.
The value of imported semiconductor equipment was the only indicator with a positive development, it said.
It is the 11th consecutive month that the index declined, with a cumulative fall of 7.59 percent, it said.
The index of coincident indicators, which reflects the current economic situation, lost 1.82 percent to 95.01 last month, Wu said, adding that it has contracted for seven months in a row, with its cumulative retreat widening to 8.2 percent.
NDC Minister Kung Ming-hsin (龔明鑫) earlier yesterday told lawmakers that the government is striving to maintain GDP growth of 3.3 percent this year.
The goal looks doable thus far, but would be difficult to achieve next year, Kung said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS