Taiwan’s business climate indicators flashed “green” in January as business conditions showed broad-based improvement boosted by healthy manufacturing activity, the National Development Council said yesterday.
The signal suggested a stable economic state, compared with the “yellow-blue” indicator a month earlier, which was dragged by a weak exports sector.
The indicators gained one point to 23 in January, with the sub-indicies on imports of machinery and electric equipment, product shipments, money supply and other component measures staying flat, the council said in a report.
The improvement muted the impact of soft readings on sales of trade and food services, exports and non-farm payroll, the report said.
The council said it expects growth momentum to continue this year from last year, as the global economy is expected to perform better with Japan and Europe showing signs of stabilization.
China, the destination for more than 40 percent of Taiwanese exports, might pose downside risks given its economic slowdown, the report said.
The leading indicators lent support to the optimistic sentiment, standing at 100.01 in January, up 0.1 percentage points from the previous month, the report said.
Export orders, real monetary aggregates, the semi book-to-bill ratio and overall employment showed positive cyclical movements, the report said.
The sub-indicies for the TAIEX’s closing price, building permits and the manufacturing climate indicated a retreat from a month earlier, the report said.
Institutional investors trimmed their positions in local shares ahead of the Lunar New Year holiday, allowing them more flexibility to cope with unforeseen headwinds elsewhere, it said.
The property market continued to see sluggish trading this year after political uncertainty and unfavorable tax plans pushed transactions to a 12-year low last year.
The coincident index, which reflects the current state of the business sector, slid for the third consecutive month to 100.88 in January, weighed by drops in electricity consumption, industrial output, and sales of trade and food services, the report said.
Many traditional manufacturing firms took a break in January, while retailers and hotels went through a low season ahead of the Lunar New Year, which fell in the middle of last month.
The situation might have reversed since the holidays, the council said, adding that cheaper oil and electricity prices should allow people to spend more money elsewhere.
The indicators edged up 0.12 percent to 99.38 in January, with the inventories-to-sales ratio and the jobless rate logging positive cyclical movements, the report said.
However, the sub-indicies on interbank overnight call-loan rates, labor costs, and lending and investments by financial institutions all displayed negative movements, it said.
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