The government’s business climate monitor was “blue” for the ninth straight month last month, as the nation’s export-oriented economy remained soft, although it is more likely to recover next quarter, the National Development Council said yesterday.
Overall, the monitor, which is made up of nine components, rose from 13 in June to 15 last month, while the index of leading indicators declined less than it had a month earlier, giving the council more confidence that a recovery could be expected, council deputy economic researcher Chiu Chiu-ying (邱秋瑩) told a media briefing.
“The gauge is now only two points away from the ‘yellow-blue’ zone,” thanks to a resilient job market and local bourse,” Chiu said.
Photo courtesy of the National Development Council
The council uses a five-color system to portray the nation’s economic health, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors indicate a transition to a stronger or weaker state.
Rallies on the TAIEX and improvements in money supply last month contributed one point each, the council said.
The high sales season for technology products by global brands underpins the council’s expectation of a recovery, Chiu said.
As artificial intelligence applications gain in popularity, the growth momentum of Taiwan’s exports would also improve, she said.
Domestically, the development of renewable energy sources and reshoring of Taiwanese firms from abroad would lend support to private investment, the council said.
Meanwhile, consumer spending would continue to thrive due to pent-up demand in the post-COVID-19 era, it said.
The index of leading indicators, which seeks to project the economic situation over the next six months, decreased 0.27 percent to 99.09, compared with a drop of 0.63 percent in June, the council said.
In addition to the stock index, new construction floor space and business confidence saw positive cyclical movements, it said, whereas export orders, labor accession rates and imports of semiconductor equipment continued to drag.
The index of coincident indicators, which reflects the current economic situation, rose 1 percent to 96.42, compared with 0.04 percent one month earlier, as exports, energy consumption, non-farm payrolls and manufacturing sales picked up, the council said.
Their increases offset a persistent retreat in industrial output and imports of electrical and machinery equipment, it said.
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