The government’s business climate monitor turned “green” last month, indicating the nation’s economy has returned to a course of stable recovery after a four-month transition, the National Development Council said yesterday, crediting the arrival of the high sales season for technology gadgets for the improvement.
The total score for major economic barometers stood at 24, a two-point increase from July, as demand for electronic components picked up ahead of the peak season.
The council uses a five-color system to indicate economic status, with “green” indicating steady growth and “red” suggesting overheating, while “blue” signals a recession. Dual-color signals mean the economy is changing gears.
Council research director Wu Ming-huei (吳明蕙) attributed the improvement to robust exports that might be sustained in the coming months as evidenced by a pick-up in sentiment among manufacturers.
“The uptrend would gather further strength through the year-end” when consumers in the West shop for holiday presents for family and friends, Wu said.
Taiwan is home to the world’s largest chipmakers, chip designers and suppliers of camera lenses, casings, touchpanels and other electronics used in smartphones, tablets, notebook computers and Internet of Things (IoT) devices.
The index of leading indicators, which aims to portray economic scenes in the coming six months, rose 0.13 percent to 101.02, gaining for the third month in a row, the council said.
While most constituent measures staged positive movements, the import of semiconductor capital equipment weakened, suggesting a high base earlier and potential business slowdown in the future, Wu said.
Taiwan ranks second in terms of global semiconductor equipment demand.
The index of coincident indicators, which reflects the current economic state, expanded to 101.85, as all sub-indices strengthened with the exception of power usage and machinery imports, the council said.
The enhancement in economic conditions helped bolster the consumer confidence index to a 22-month high of 82.2 this month, according to a survey released yesterday by the National Central University.
Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, said the planned 3 percent pay raise among government employees also lent support to the sentiment.
The pay raise, which is to take effect next year, has fueled expectations that private companies would follow suit, he said.
“The pay rise announcement appears to effectively subdue concerns over pension reforms,” he said.
Meanwhile, the gauge on investment interest continued to receive support in TAIEX rallies as the sub-index climbed to 95.4.
However, Dachrahn Wu voiced concern over correction risks, saying that values above 90 suggest overheating as seen in the past.
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