After four straight months of stable growth, the nation’s business climate monitor turned from “green” to “yellow blue” last month, indicating weakening economic momentum, the National Development Council (NDC) said yesterday.
The council’s business indicators measure growth or decline in nine areas of the economy.
Among the nine components, M1B money supply, the industrial production index, producers’ shipments index, customs-cleared exports, the Taiwan Institute of Economic Research’s manufacturing sector composite indicator, as well as sales in the retail, wholesale and restaurant sectors, weakened, the council said in its monthly report.
Moreover, the total score of the composite monitoring indicators — which include the trend-adjusted leading and coincident indicators — decreased 7 points from the previous month to 22 points last month, the largest setback since 2013, it said.
The index of leading indicators, which is used to gauge the nation’s economic outlook in the next six months, slid to 99.88 from a revised 100.22 in the previous month, marking its seventh straight monthly of decline.
The index of coincident indicators, which is used to gauge monthly economic conditions, also slid last month, from 100.46 to 100.02.
The leading and coincident indicators declined, as the electronic components industry reported inventory adjustments at the customer end and the cryptocurrency mining frenzy showed signs of abating, the council said, adding that it hoped it was a short-term phenomenon.
As the July-to-September quarter is usually a better season than the April-to-June quarter for the electronics industry, the council said it is cautiously optimistic about the business indicators’ overall showing this quarter.
“The government will be closely monitoring the economic situation,” it said in a statement.
In related news, consumer confidence dropped for a fourth straight month, mainly due to poor sentiment on equity investment, a survey released yesterday showed.
The consumer confidence index slid 1.44 points to 82.38 points this month, with all six sub-indices declining, the Research Center for Taiwan Economic Development at National Central University said in a statement.
The index examines public expectations about the stock market’s performance, household finances, durable goods purchases, job opportunities, consumer prices and the economic outlook over the next six months.
This month’s survey, which polled 2,725 people between Thursday last week and Monday, showed that consumers were relatively confident about the outlook for employment, but less upbeat about the outlook in the other five areas, the statement said.
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