Economic monitoring score surges for 2nd straight month in May

But the monitoring indicators continued to signal a “blue” light for the ninth consecutive month in May, indicating the local economy remains in recession.

The CEPD adopts a five-color rating system to gauge the performance of the domestic economy. A green light means stable economic growth, a red light indicates an overheated economy, a blue light signals a recession, a yellow red light represents an economy heating up, and a yellow blue light shows an economic downturn.

CEPD data showed that the coincident monitoring index, designed to gauge the economic performance for a given month, stood at 87.4 in May, surging 2.7 percent from April for the fourth consecutive monthly rise of its kind.

Meanwhile, the leading monitoring index, a barometer of the economic outlook for the coming three months, soared 3.3 percent from April to 94.9 in May, also marking the fourth consecutive monthly rise of its kind.

The upward movement of both the coincident and leading monitoring indexes has clearly indicated slow and steady improvement of Taiwan's economy, providing a glimmer of hope that the island's economic slump could ease in the near future.

In addition, the annualized six-month rate of change of the leading indicators index rose by 7.8 percentage points from April to 3.5 percent — the first positive figure in 16 months.

All seven leading indicator components, except for new building permits, contributed positively to the index. Export orders, average monthly overtime in industry and services, book-to-bill ratios in the semiconductor machinery industry, monetary aggregate M1B, stock prices, and producers' inventory all surged in May, CEPD data showed.

But of the nine components constituting the composite monitoring indicator for economic conditions in May, only the M1B aggregate money supply turned a yellow-red light in the month from a green light in April, as a result of the M1B posting a higher annual growth of 12.7 percent in May, compared to 9.3 percent in April. The remaining eight elements continued flashing a blue light.

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