The government’s business climate monitor was set to “green” for the ninth consecutive month last month, as the economy continued to improve, albeit at a milder pace, the National Development Council said yesterday.
The monitoring system stood at 24, four points lower than in February because some firms conducted annual maintenance, which disrupted manufacturing activity, council director of research Wu Ming-huei (吳明蕙) said.
“The disruption was temporary and did not affect the overall economy, which remained on the course of stable recovery,” Wu said.
Of the nine constituent gauges, money supply, industrial output, sales of manufacturing goods, as well as retail, wholesale and dining sales softened, Wu said.
Some people turned cash into time deposits or life insurance policies, citing risk concerns, even though global bourses showed positive movements, she said.
Exports, imports of machinery and electric equipment, and non-farm employment continued to gain ground, aided by sustained growth momentum, Wu said.
The IMF has upgraded its forecast for global GDP growth this year, while major trading partners such as the US, China, Europe and Japan all had positive GDP showings, Wu said, adding that the trend bodes well for Taiwan’s export-focused economy.
Still, growing geopolitical tensions between the US and North Korea, and rumors of a revival of protectionism warrant caution and a close watch, she said.
Taiwan would take a hard hit if US President Donald Trump honors a pledge to raise trade barriers and cut dependence on relatively cheap imports, she said.
Domestically, private investment appears to be in healthy shape, as semiconductor firms continued to buy capital equipment to maintain their technology leadership and advance on the world stage, Wu said.
The government’s Forward-looking Infrastructure Construction Program might help spur private investment, she said.
In addition, consumer spending might receive a boost with Mother’s Day and the Dragon Boat Festival falling next month, a traditionally high sales season for department stores, gift shops and restaurants, Wu said.
However, longstanding wage stagnation might limit the pace of improvement.
The council’s leading series of indicators, which aim to predict the economic scene six months ahead, declined 0.17 percentage points to 101.53, the report said.
Building permits and TAIEX closing prices had positive cyclical movements last month, while readings on export orders, manufacturing sentiment and cash supply shed points, the report said.
The coincident index, which reflects the current situation, weakened 0.49 percentage points to 103.05, the report said.
That was because overall power consumption, industrial production and manufacturing sales showed moderate retreats, the report said.
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