The government’s business climate monitor last month flashed “yellow-blue” again as the total score sank to the brink of recession, as the economic slowdown progressed, the National Development Council (NDC) said yesterday.
The overall business gauge shed 5 points to 17 last month, just 1 point away from the “blue” zone, which suggests a recession, the council said.
“We see warning signs ahead, and will closely monitor the situation and come up with prompt response measures,” NDC research director Wu Ming-huei (吳明蕙) told a media briefing.
The council uses a five-color system to describe the state of the economy, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual-color signs reflect a transition.
The indices on industrial production, exports, commercial and retail sales all fell, and so did those for imports of electrical and machinery equipment, which reflect plans to expand manufacturing capacity, the agency said.
Wu voiced particular concern over the purchasing managers’ index, which posted its first contraction since April 2016, with firms giving a conservative business outlook for next year.
That suggests that exports might not lend much support to GDP growth next year and stimulus measures might be needed to bolster domestic demand, Wu said.
Authorities are taking stock of the policy tools at their disposal and the council seeks to come up with a stimulus package before the Lunar New Year holiday in early February, council Minister Chen Mei-ling (陳美伶) said on Wednesday.
The leading index series, which predicts the economic picture for the coming six months, slid 0.65 percent to 99.58, the council said.
Data on export orders, stock closing prices, corporate confidence and new construction floor space all showed negative cyclical movements, the report showed.
Semiconductor equipment imports, monetary measures and net employment rates showed positive cyclical movements, it said.
The coincident index series, which reflects economic changes as they happen, stood at 99.28, down 0.42 percent from October on weaker electricity consumption, manufacturing shipments and non-farm payrolls, the council said.
In related developments, the consumer confidence index was 79.74 this month, 0.39 points lower than last month, as people grew increasingly pessimistic about the value of their stocks, a survey by National Central University showed yesterday.
The sub-index on stock investment lost 3.1 points to 74.5 as a continued worldwide stock rout drove investors to the sidelines, the survey said.
Fewer respondents also expected consumer prices to rise, with the sub-index softening to 45.4 as international crude prices plunged amid economic uncertainty, it said.
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