Economic indicator returns to yellow-blue light
By John Liu, The China PostTAIPEI, Taiwan -- Taiwan's overall monitoring indicator dropped 3 points to 20 in July and flashed a “yellow-blue” signal, signifying an economy transitioning from sluggish to stable, according to a report released yesterday by the Cabinet's Council of Economic Planning and Development (CEPD, 經建會).
August 28, 2013, 12:01 am TWN
CEDP Department of Economic Research Director-General Hung Jui-bin (洪瑞彬) said that the indicator showed that “the economy lacks recovery momentum.”
In June, the overall monitoring indicator flashed a “green” signal, signifying a stable economy. Before June, the indicator had flashed yellow-blue signals for nine consecutive months.
Hung said that while the indicator flashed green in June, its indicator score of 23 was the lowest possible in the 23-31 green signal range. Hung said that “there are many uncertain factors that are influencing the economy, and both positive and negative factors were present, without a dominating force showing the economy will go upward or downward in the near future.”
The report says that while market confidence and indicators for the finance sector remain stable, those for the manufacturing sector, trade performance, consumption and labor market fell short of expectations.
A major global concern is that economic growth of emerging markets including China has slowed, and the downward trend is unlikely to shift anytime soon, the report said. On the positive side, growth in the U.S. and Japan is expected to improve every quarter, while the eurozone's economy is gradually stabilizing.
The CEPD pointed out other reasons to be optimistic: China's extended National Day holidays in October, upcoming shopping seasons in Western countries and the Taiwan Government's plan to help businesses expand into emerging economies would all help with Taiwan's exports in the future, the CEPD said.
The government is launching programs to stimulate domestic consumption. Also, with new smart devices expected to be rolled out later this year, the Mid-Autumn Festival and annual promotional sales in department stores coming soon, domestic consumption will likely grow, the CEPD said.
With revised data, the composite leading index stood at 102.85, up by 0.03 percent from June. Its trend-adjusted index decreased by 0.13 percent to 100.22.
Among the seven indicators making up the trend-adjusted index, real monetary aggregates M1B, the stock price index and the TIER manufacturing sector composite indicator had positive cyclical movements from the previous month, while the index of export orders, net accession rate of employees on payrolls of industry and services, SEMI book-to-bill ratio and building permits had negative cyclical movements.
The coincident index, after taking into account revised data, stood at 101.47, up by 0.16 percent from June. Its trend-adjusted index increased by 0.01 percent to 98.87.
Among the seven indicators making up the trend-adjusted index, electric power consumption, real machineries and electrical equipments imports and the index of producer's shipment for manufacturing had positive cyclical movements from the previous month, while nonagricultural employment, sales of trade and food services, real customs-cleared exports and the industrial production index had negative cyclical movements.