Sat, Oct 27, 2018 - Page 12 News List

Economy slowing due to volatility: NDC

By Crystal Hsu  /  Staff reporter

The government’s business climate monitor last month turned “yellow-blue,” indicating that the nation’s export-driven economy is losing steam as US-China trade tensions and emerging market volatility deepen uncertainty, the National Development Council (NDC) said yesterday.

The overall business gauge shed two points to 22, dragged by weaker readings on industrial output and manufacturing industry sentiment, among other measures, the council said in a report.

“Domestic firms have turned cautious about their business outlook, as the US-China trade dispute and the rout in emerging markets linger,” NDC research director Wu Ming-huei (吳明蕙) told a media briefing.

The council uses a five-color system to describe the nation’s economic condition, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual-color signs reflect a transition.

The economy is still expanding, although the pace has softened a bit amid increased downside risks, Wu said, adding that the main problem lies with private-sector confidence.

The government has been taking steps to shore up private investment in renewable energy, biotechnology and other areas, but has refrained from intervening in equity markets, Wu said.

The leading index series, which predicts the economic picture in six months, stood at 101.26 last month, down 0.11 percent from a month earlier, the report said.

Data on export orders, TAIEX closing prices and M1B monetary measures all showed negative cyclical movements, the report showed.

Semiconductor equipment imports, new construction area and net employment rates showed positive cyclical movements, it said.

The coincident index series, which reflects existing economic twists, increased 0.24 percent to 100.82 on the back of improvements in machinery and electrical equipment imports, and customs-cleared exports, the council said.

The indices for manufacturing shipments, trade and food sales, and non-agricultural employment posted negative movements, it said.

Wu said she did not see signs that the economy might take a downturn.

Instead, a stable job market and the advent of the peak sales season for tech products and clothing might lend support to consumer spending abroad and at home, she said, adding that unemployment last month dropped to a new low of 3.76 percent.

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