Taiwan's economy saw a slight bounce last month with the composite index of leading economic indicators rising 1.5 percent to 107.4 points from May, largely due to the slower growth of wholesale prices and rising stock prices, according to a report released by the Council for Economic Planning and Development yesterday.
Last month's gain was first since May last year, the council said in its report.
Improvement in another four components of the leading indicators -- M1B money supply, floor area permitted for construction, manufacturers' new orders and the amount of exports clearing customs -- also helped to push up the indicators, the council said in its report.
A decrease in average work hours in the manufacturing sector eased the rising curve somewhat, the council said.
According to the council's poll, manufacturing sales increased by 2.1 percent from the previous month, and 0.5 percent from a year ago.
New orders also increased by 1.7 percent from May, a 3.8 percent increase from the same period last year.
However, the average equipment utilization rate was 79.6 percent, down by 0.2 percent from May and 0.7 percent from a year ago, while sales profitability, stood at 4 percent last, a drop of 0.1 percent from last month and last year, according to the report.
The council uses a five-color spectrum to gauge the economy's health and the spectrum continued to flash the "yellow-blue" light last month, the report said, although the monitoring indicators rose by 2 points.
Yellow-blue indicates a slowdown, while blue indicates recession, green means steady growth, yellow-red a slight overheating and red an absolute overheating.
The improvement in the indicators shows that the economy is picking up vitality and entering a new phase of accelerating growth, the council said.
* Six out of seven components in the index contributed to the improvement last month.
* The six components were the wholesale price index, the stock market index, floor space permitted for construction, new orders received by the manufacturing sector, the amount of exports clearing customs, and the M1B money supply.
* The only component that deteriorated was the average working hours per person in the manufacturing sector.
* The June rise follows a revised 1 percent growth in May.
* The council's five-color spectrum continued to flash yellow-blue last month -- indicating a slowdown.
The council also conducted a survey of manufacturers last month, and 21 percent of respondents expected the economy to be better over the next three months, up from the revised 18 percent a month earlier, while another 16 percent held a negative view, down from 17 percent a month earlier.
Looking ahead, the economy will be wary of high energy prices and the fear of terrorist attacks, but the negative effect will be offset by the recovering US economy, as well as strong demand for electronics and information technology products, the council's report said.
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