The leading indicator index dropped for the fourth straight month to its lowest point in eight months last month, signaling that economic growth is slowing, the Council for Economic Planning and Development (CEPD) said yesterday.
The index, which is used to gauge the economic outlook for the upcoming six-month period, shed 0.4 percent from a month earlier to 117.6 points last month, the council’s statistics showed.
“Although the economy is growing, its momentum is decreasing,” Council for Economic Planning and Development Vice Minister Hu Chung-ying (胡仲英) told reporters following a press conference, adding that it was the same case elsewhere in the world.
The latest leading indicator index of the Organisation for Economic Co-operation and Development (OECD) has fallen for the third straight month and that of Asian countries fell six months in a row, the council’s data showed.
The index’s annualized six-month rate of change, which provides a more accurate forecast of business cycles, also indicated a downturn.
The growth rate declined for the 10th consecutive month to 1.8 percent last month, down 2.3 percentage points from August.
“If the rate dropped to below zero, that could mean a reverse in an economic cycle,” Hu said.
However, he said that it would still depend on the following trend, because it might rebound to positive afterward.
Five out of the seven components making up the leading indicator index recorded negative cyclical movements last month from August, including export orders, manufacturing inventory, building permits, average monthly overtime in industrial and service industries and the SEMI book-to-bill ratio.
“Although the global economy has shown evident slowdown, the economy will continue to benefit from improving cross-strait relations,” Hu said, saying that the government’s efforts to attract foreign investment would support growth.
The coincident index rose 0.6 percent from August to 124.4 points with its trend-adjusted index dropping 0.1 percent to 107.2. The sub-indexes of non-farm employment, wholesale sales and retail and food services had positive cyclical movements from August, the council said.
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