The business climate monitor last month remained “yellow-blue,” indicating that the nation’s economy is heading toward a downturn as the US-China trade war continues, the National Development Council (NDC) said yesterday.
The overall score remained unchanged at 22, as imports of machinery and electrical equipment showed improvement, but manufacturing shipments and non-agricultural employment remained sluggish, the council said in a report.
“The economy is losing steam judging from the latest signals,” council Deputy Minister Cheng Cheng-mount (鄭貞茂) said.
The council uses a five-color system to portray 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 government is closely monitoring the situation and would take measures to prop up the economy if necessary, Cheng said, adding that the Executive Yuan would soon convene a meeting on how to foster capital repatriation.
Firms based in China have voiced willingness to move back to avoid extra tariffs imposed by Washington on Chinese exports, and have called on the government to remove investment barriers regarding land, labor and electricity shortages.
The leading index series, which predicts the economic climate in six months, weakened 0.6 percent to 99.7, the report said.
The indices on imports of semiconductor equipment and monetary supply demonstrated positive cyclical movements, but data on export orders, TAIEX closing prices, new construction floor areas and net employment rates pointed down, the report said.
The leading index series had shed 1.81 percent for the past five months, the council said.
The coincident index series, which reflects incumbent economic conditions, slipped 0.11 percent to 100.18, down for the 11th straight month, it said.
Among the seven constituent indicators, imports of machinery and electrical equipment, industrial production and sales of trade and food services posted growth, while electricity consumption, producer’s shipments, exports and non-agricultural employment saw negative cyclical movements, it said.
The council said it took solace in healthy private investment data and expects the component to uphold the economy.
Private investments might continue to improve when the government introduces favorable measures, Cheng said.
The lagging indicator series paired 0.52 percent to 100.22, the council said.
The labor cost index, loans and investments of financial institutions, and unemployment rates had negative cyclical movements, it said.
Inventory value for makers and the interbank overnight call-loan rates registered positive cyclical movements, it said.
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