The government’s business climate monitor signaled “yellow-blue” last month as the New Taiwan dollar’s appreciation weakened the nation’s exports and capital equipment imports in local currency terms, the National Development Council (NDC) said yesterday.
STABLE STREAK
The latest business climate gauge showed that the nation’s export-focused economy is changing gears after signaling a stable “green” for nine straight months.
“The government will pay close attention to any shifts in the economic landscape, as leading and coincident index series both showed negative cyclical movements,” NDC Director Wu Ming-huei (吳明蕙) said.
COLOR CODED
The council uses a five-color system to indicate the nation’s economic status, with “green” indicating steady growth and “red” suggesting overheating, while “blue” signals a recession.
Dual-color signs reflect a transition.
The monitoring system posted 21 last month, three points lower from the previous month.
LOSING ITS SPARK
Wu attributed the downturn to lackluster exports and imports of electrical and machinery equipment in NT dollar terms, which softened sentiment among local manufacturers.
The NT dollar has risen 6.5 percent against the US dollar in the first four months of the year, eating away at the profitability of exporters, Wu said.
NEXT-GEN ADJUSTMENTS
Global technology brands are also adjusting their inventories ahead of their next-generation device launches, which traditionally happens in the second half of the year, she said.
Taiwan is home to contract makers of critical components used in smartphones, laptops, televisions, cars and other products.
PS AND DOWNS
The index of leading indicators, which is used to gauge the economic outlook for the next six months, stood at 100.52, down by 0.5 percentage points from the previous month, the NDC said in a report.
Among the seven subindices, only building permits and TAIEX closing prices registered positive cyclical movements, the report said.
The gauges for export orders, imports of semiconductor equipment, manufacturing sentiment, money supply and the net employee accession rate all posted negative movements.
CURRENT CONDITIONS
The index of coincident indicators, which reflects the present economic condition, logged 100.21, down by 1 percentage point from the previous month, the report said.
Of the seven components, only non-agricultural employment had a positive cyclical movement.
The indices on producers’ shipments for manufacturing; imports of machinery and electrical equipment; customs-cleared exports; industrial production; sales of trade and food services; and power consumption all had negative cyclical movements, it said.
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