Economy slowing down, says CEPD

The nation's economy has shown signs of a slowdown despite a slight improvement in leading indicators, the nation's top economic planning agency said yesterday.

The index of leading indicators for May stood at 110.2 points, up 0.3 percent from April, when it registered a revised 0.1 percent month-on-month fall, said the Council for Economic Planning and Development (CEPD).

The index is used as a gauge for the economy's direction in coming months.

The May index of coincident indicators, which coincides with the current pace of economic activity, rose 1.3 percent month-on-month to 111.3 points, after posting a revised 0.1 percent decline in April, the council said.

Both indexes for leading and coincident indicators are based on a 2001 benchmark of 100.

The total score of monitoring indicators for May was 20 points, compared with 18 points in April.

The May monitoring indicators showed a "yellow-blue light," signalling a slowdown in the economy, the council said.

The "yellow-blue light" in May is the second consecutive slowdown's signal in a row, after the council reported the same for April.

Five of the seven leading indicators for May made positive contributions, including housing start approvals in area terms, customs-cleared exports, the wholesale price index, the average number of monthly working hours in the manufacturing sector and orders for manufacturers.

Among the two negative factors, M1B money supply in May showed smaller year-on-year growth than in the previous month, and the average weighted index of the Taiwan Stock Exchange posted smaller year-on-year gains than the preceding month.

The council said a survey of manufacturers in May showed that 10 percent of the respondents expect the economy to improve over the next three months, down from a revised 18 percent a month earlier.

Some 22 percent of the respondents held a negative view of the economy, up from 14 percent in the preceding month.

About 68 percent of manufacturers expected the economy to maintain its current direction, flat from a revised 68 percent in April, according to the survey.