The composite monitoring indicators for the economy flashed a “blue light” for the seventh straight month last month as the nation’s economy remained under pressure, the Council for Economic Planning and Development (CEPD) said yesterday.
The score of the composite monitoring economic indicators, which track nine components, rose one point from a month earlier to 15 last month.
The nine straight blue-light signals marked the third-longest run in history. The monitoring indicators flashed a blue light for 15 consecutive months between 2000 and 2002 when the dot-com bubble burst, while they were blue for 10 straight months in 1985 because of an oil crisis and in 2008 and 2009 because of the global financial crisis.
However, the index of leading indicators rebounded for a ninth straight month last month, providing more evidence that sentiment could gradually recover in the second half of the year from the first half, the council said.
The index of leading indicators, which is used to gauge the short-term economic outlook, increased 0.5 percent from a month earlier to 131.4 points, the council said in its monthly report.
The index’s annualized six-month rate of change, which provides a more accurate forecast of the short-term business cycle, climbed 0.3 percentage points to 6.2 percent last month from the previous month, marking nine months of consecutive improvement.
“The trend in the leading index indicated the economy may be gradually moving away from the current sluggish sentiment in the near future,” Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a press conference.
The trend in coincident indicators also showed that the economy could have bottomed out in the first quarter, Hung added.
Last month’s trend-adjusted index of coincident indicators, which tracks the current pace of economic activity, rose 0.6 percent to 97.9 points from April and it has been rising since March, providing evidence that the economy bottomed out in February, Hung said.
However, Hung said the council still needs more time to evaluate when the actual bottom would be, as many indicators would still need revising in the near future.
In related news, this month’s consumer confidence index (CCI) slid for the third straight month, falling 1.25 points to 76.36, mainly because of rising uncertainties on the local stock market, a National Central University survey showed yesterday.
The CCI gauges public expectations about the stock market, household finances, durable goods, job opportunities, consumer prices and the economic outlook for the next six months.
This month’s survey — which polled 2,438 people over the age of 20 from Tuesday to Thursday last week — showed increasing uncertainty over the outlook for the stock market, the economic outlook, job opportunities and consumer prices, while sentiment about the other two sectors improved, the university’s Research Center for Taiwan Economic Development said.
The sub-index for the stock market shrank to its lowest level since February 2009 to stand at 47.1 this month, down 6.9 points from a month earlier, marking the biggest fall among all the sectors, the center’s report said.