Taiwan’s business climate monitor last month turned “yellow-blue” for the second straight month as major economic barometers stayed in “slowdown mode” due to economic headwinds abroad, the National Development Council (NDC) said yesterday.
The overall score gained 1 point to 18, as imports of electrical and machinery equipment displayed positive movements, the council said, adding that whether the rise would continue this month is uncertain.
“Both leading and coincident indicators continued to decline, although the pace eased,” NDC research director Wu Ming-huei (吳明蕙) told a news conference in Taipei.
Photo: CNA
The general downtrend suggests the economy remains soft and warrants close attention, Wu said.
The council uses a five-color system to indicate the state of the nation’s economy, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors indicate a shift to a stronger or weaker state.
Active purchases of capital equipment by local semiconductor manufacturers enabled the business monitor to steer away from the recession path, the official said.
Taiwan is home to the world’s largest contract chipmakers, supplying 60 percent of advanced chips used in high-performance computing, flagship smartphones and data centers.
The Christmas season in the West and the Lunar New Year in Asian countries would support sales of consumer electronic products, although high inflation and monetary tightening could curtail demand, the council said.
The index of leading indicators, which aims to predict the economic situation in the coming six months, weakened 0.97 percent to 95.63, as all sub-indices registered negative cyclical movements except for the reading on imports of semiconductor equipment, the council said.
Major local semiconductor firms said they are also taking a hit from order cancellations and inventory adjustments by global clients, but the magnitude is limited.
The index of coincident indicators, which reflects the current economic situation, decreased 1.34 percent to 95.05, as all comprising gauges fell, with the exception of non-farm payroll, it said.
The end of graduation season and an ongoing recovery in tourism sectors shored up hiring activity, it said.
Service providers catering to domestic demand could see business improvement, but operators linked to exports and financial markets are looking at a cold winter and spring, it said.
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