The government’s business monitoring system flashed a “green” signal again last month for the third consecutive month, despite the decline in the total score of indicators due to fewer working days, the National Development Council said yesterday.
The council’s composite monitoring indicators measure growth or decline in nine areas of the economy.
Fewer working days — due to several typhoons hitting Taiwan last month — dragged down the customs-cleared exports and producers’ shipments for manufacturing, the council said.
Thus, the total score of the monitoring indicators — which include both the leading and coincident indicators — decreased 2 points from August to 23 last month, according to the council’s monthly report.
“However, the decline was a just short-term phenomenon and many other indicators showed the economy is still on a track toward recovery,” council research director Wu Ming-huei (吳明蕙) told a news conference in Taipei.
The council uses a five-color spectrum to categorize the nation’s economic health, with “blue” signaling a recession, “green” steady growth and “red” overheating, while “yellow-blue” indicates a transition between recession and growth, and “yellow-red” a transition between growth and overheating.
An indicator score of between nine and 16 represents a blue light, while 17 to 22 indicates yellow-blue, 23 to 31 signals green, 32 to 37 represents yellow-red and 38 to 45 signals red.
Of the nine components, the signals for four of them flashed green, including the M1B money supply, the stock market, the industrial production index and the Taiwan Institute of Economic Research (TIER) manufacturing composite indicator.
The sub-indices for non-agricultural employment and for sales in the retail, wholesale and restaurant sectors flashed a yellow-blue light, while the sub-index for imports of machinery and electrical equipment flashed red last month, the report showed.
Wu said the sub-index for machinery and electrical equipment imports improved from “yellow-red” to “red,” suggesting manufacturers’ growing demand for more equipment last month. Moreover, semiconductor equipment imports last month grew 50 percent to US$1.56 billion from a year earlier, she said.
Overall, both leading and coincident indicators showed continual upward trends, which means the nation’s economy has sustained a modest recovery, Wu said.
The index of leading indicators, which is used to gauge the nation’s economic outlook for the next six months, posted its seventh consecutive month of growth last month, rising from 100.89 in August to 101.67.
The index of coincident indicators, which is used to gauge monthly economic conditions, also reported its seventh consecutive increase last month, increasing from 101.96 to 102.72.
The council said that exports are expected to benefit from recent stable oil prices and high-season sales, especially electronics products.
Growth momentum could be sustained, as semiconductor companies invest more in advanced technologies, according to the report.
However, the council said that some external factors still need to be closely monitored, including the Nov. 8 US presidential election and the US Federal Reserve’s interest rates plans.
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