Economic growth last month remained stable, with the monitoring indicator flashing a “green” light for the fifth consecutive month, the Council for Economic Planning and Development (CEPD) said yesterday.
“The indicator was at 27 points last month, the same as that in February, indicating that the local economy remained steady,” Hung Jui-bin (洪瑞彬), director-general of the council’s Economic Research Department, told a media briefing yesterday.
However, cyclical business indicators showed signs of a deterioration, with both the leading index and the trend-adjusted coincident index declining, Hung said.
The leading index decreased by 0.1 percent from February, to reach 149.1 last month. The coincident index rose 0.1 percent month-on-month to reach 157.2 last month. However, on a trend-adjusted, basis, the coincident index declined 0.3 percentage points to 101.14 points last month, he added.
The leading index, designed to measure economic activity in the next three to six months, saw its annualized six-month rate of change drop 0.4 percentage points to 0.2 percent last month, making it the seventh consecutive month of decline since last September. The accumulated rate of decline in the past seven months was 5 percentage points.
Among the seven indicators that make up the leading index, stock prices, real monetary aggregates M1B and average monthly overtime hours in the service and manufacturing industries rose from February, while the semiconductor book-to-bill ratio, producers’ inventory, building permits and export orders dropped.
“The council is worried about how long the decline will last. However, the decline began to narrow last month, and we expect to see better performance next month,” said Wu Ming-huei (吳明蕙), a director at the Economic Research Department, said yesterday.
Last month’s rate of decline was 0.4 points, down from 1.1 points in February, Wu said.
The coincident index, which indicates the current pace of economic activity, saw its trend-adjusted series decrease 0.3 percent to 101.1 points last month.
Among the seven indicators that make up the coincident index, only manufacturing sales and customs-cleared exports saw improvements from February.
While many domestic and international research institutes have recently raised their forecasts for the nation’s economic growth, the council said it remained cautiously optimistic about economic growth.
The CEPD uses a five-color spectrum to gauge domestic economic health, with “blue” signaling recession; “yellow-blue” a slowdown; “green” steady growth; “yellow-red” a slight overheating; and “red” overheating.
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