Fri, Jan 28, 2005 - Page 11 News List

Economic activity keeps slowing, CEPD figures show

LEADING INDICATORS The total score of monitored indicators for last month fell to 25 points, signaling a `green light' that points to steady economic growth


The economy continued to slow last month, with the index of leading indicators down 1.1 percent from November, when it fell 1.3 percent, according to official figures released yesterday.

The original reading of the November index of leading indicators, designed to measure economic activity three months ahead, was a 1.5 percent month-on-month decline, the Council for Economic Planning and Development (CEPD) said.

Last month's index of coincident indicators, which measure the current pace of economic activity, fell 2.4 percent from November, when it was down 0.1 percent.

The total score of monitored indicators for last month fell to 25 points from 28 points in November, signaling a "green light" that points to steady growth of the economy, the council added.

The CEPD uses a five-level spectrum to gauge domestic economic health, with blue indicating recession, yellow-blue a slowdown, green steady growth, yellow-red a slight overheating and red an absolute overheating. The index has been at the "green light" level since October, easing down from "yellow-red" levels in the previous four months. In May, the indicator flashed the first "red" light reading since December 1994 before moderating in June.

Looking ahead, the economy is expected to maintain normal growth as domestic consumption and new infrastructure projects should offset a slowdown in the global economy, the CEPD said.

Most domestic companies feel that it will be business as usual during the first quarter of this year, with pessimistic and optimistic views accounting for only about 15 percent each, according to government poll released yesterday.

According to the survey results made public by the CEPD, 72 percent of companies questioned last month were neutral about their business outlook in the first quarter of this year, while 11 percent were positive and 17 percent negative.

The 72 percent of companies expressing a neutral stance reflected an increase of 4 percent over the November level, while the ratios for pessimists and optimists were down by 3 percent and 1 percent, respectively.

Last month, sales in the manufacturing sector declined by 1.9 percent in value month-to-month, but grew 13.5 percent year-on-year. Total export order value dropped by 1.9 percent compared with the November figure but rose by 15.1 percent on an annual basis.

At the same time, last month's industry capacity utilization rate averaged 80.3 percent, up 0.2 percent from the previous month but down 0.1 percent from a year ago. Average business return rates stood at 4.8 percent, a fall of 0.1 percent and 0.3 percent, respectively, as compared to the ratios for November and a year earlier.

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