The nation’s economic monitoring signal flashed a fourth straight “blue” light in December, with all indicators contributing negatively to the index, which dropped to its lowest level in seven years, the Council for Economic Planning and Development (CEPD) said yesterday.
The barometer reaffirmed an economic downturn that is expected to persist for another three to six months, the council said.
“The business cyclical indicators flashed a fourth consecutive blue light in December, indicating a continued economic slowdown,” Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a press briefing.
The aggregate score for the climate gauge dipped 2 points to 9, the lowest score possible. The index ranges from 9 to 45.
The last time the nation saw such an abysmal performance was in November 2001, when the information technology (IT) bubble burst, dealing a heavy blow to exports, Hung said.
Hung voiced concern that the global financial storm could continue to wreak havoc on the economy as it is hurting both exports and domestic demand.
The leading index stood at 93 points, representing a 2.3 percent month-on-month drop. The main factors were declines in “export order[s], average monthly overtime in industry and services, building permits and [the semiconductor] book-to-bill ratio,” the report said.
The nation’s export orders saw a record drop of 33 percent in December, signaling a continued decline in demand for Taiwanese electronics and communications products in the next one to three months, the Ministry of Economic Affairs said last month.
“Hopefully, the consumer voucher program and other stimulus measures can help ease and shorten the recession,” Hung said.
Last year was tumultuous because of surging oil and raw material costs in the first half and weak exports in the second half.
The coincident index, a measure used to reflect financial and economic conditions, stood at 81.6 points, marking a 8.2 percent month-on-month drop, while the trend-adjusted index fell 8.4 percent to 75.4 points, “sliding for the tenth consecutive month,” the report said.
“All coincident indicators contributed negatively to the index, led by large decline[s] in [the] industrial production index, electric power consumption, real manufacturing sales and real customs-cleared exports,” the report said.
The industrial output index slid to 77.4 points from 84.9 points a month earlier, the report showed.
CEPD analyst Wu Ming-huei (吳明蕙) said there were no signs of decelerating downshifts in any of the seven coincident indicators.
Both Hung and Wu said the wholesale and retail index may have improved last month, as the government’s issuance of vouchers had boosted consumption over the Lunar New Year holiday.