Sat, Sep 27, 2014 - Page 13 News List

Economic indicator for last month flashes ‘green’

MOMENTUM:Contributions from semiconductor companies via investment in imports of machinery and electrical equipment helped maintain economic growth

By Camaron Kao  /  Staff reporter

The nation’s score on an index of economic monitoring indicators last month rose two points to 29 points from a month ago, indicating the momentum for economic growth is still strong, the National Development Council said yesterday.

The rising score was due to higher annual growth of “industrial production” and “imports of machinery and electrical equipment” last month compared with July, according to the council’s data.

Economic development director at the council Wu Ming-huei (吳明蕙) attributed the higher industrial production growth to contributions from makers of electrical components, computers, optical products and machinery products.

As for the rising growth in imports of machinery and electrical equipment last month, Wu said it was because of higher investment by semiconductor companies, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and iPhone 6 supply chain companies.

Economic monitoring indicators last month flashed a “green” light for the seventh consecutive month, the report said.

“Although the issue of tainted oil is expected to drag down sales of trade and food services, and the production of food processing companies this month, the impact might be slight and short-term,” Wu said.

“There is still a high chance of seeing another green light this month,” he added.

The council uses a five-color spectrum to categorize the nation’s economic health, with “blue” signaling recession, “green” indicating steady growth and “red” overheating, while “yellow-blue” indicates a transition between recession and growth, and “yellow-red” represents a transition between growth and overheating.

The index of coincident indicators, which reflects monthly economic conditions, reported its 13th consecutive increase, rising by 0.41 percent to 101.92 points last month from 101.5 points the previous month, the council reported.

The index of leading economic indicators, which is used to gauge the nation’s short-term economic outlook, registered its sixth decline last month, falling to 100 points, down 0.13 percent from 100.14 points the previous month, it said.

Wu said the decline was likely to be temporary as the long-term trend of the index is still moving upward.

The council is still optimistic about the global economic outlook, despite the Organisation for Economic Co-operation and Development’s declining leading indicators for some nations, Wu said.

The positive outlook is due to leading indicators for countries with closer trade ties with Taiwan still doing relatively well, Wu said.

For instance, leading indicators for the US and China both rose 0.2 percent in July from June, while eurozone indicators dropped 0.08 percent, data showed.

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