Sat, Apr 27, 2019 - Page 12 News List

Business climate monitor still ‘yellow-blue’: NDC

By Kwan Shin-han  /  Staff reporter

A woman stands beside large canvases showing discounted clothing prices to attract more customers in Taipei yesterday.

Photo: CNA

The National Development Council (NDC) yesterday said that uncertainly continued to cloud the nation’s economic outlook, with the business climate monitor for last month remaining “yellow-blue.”

While the yellow-blue signal suggests a transition between recession and growth, the council said it is hard to ascertain whether the economy would improve in the coming months considering a mixed performance in different sectors.

The business climate reading has been “yellow-blue” since September last year, with December the only exception, when it turned “blue,” signaling a sluggish economy.

The monitoring indicator is based on the performance of nine economic indices, such as the TAIEX and industrial production.

The overall score climbed to 20 points last month from 17 in February.

The council said the increase came from the improvement in three indices: customs-cleared exports, imports of machinery and electrical equipment, and the manufacturing composite indicator compiled by the Taiwan Institute of Economic Research (台灣經濟研究院), although the industrial production index decreased compared with a year earlier.

The leading indicator, which is composed of seven indices that are used to predict changes in the economy, rose for a third straight month to 101.58 from 100.86 in February.

The coincident indicator, which is also made up of seven indices that reflect the current economic situation, declined for the 15th consecutive month to 97.87 from 97.02 in February, council data showed.

“We only saw improvements in Taiwan’s external trade and financial sectors, but there were no visible signs of improvement in the manufacturing, food and beverage, or retail industry,” NDC research director Wu Ming-huei (吳明蕙) told a media briefing.

The council is thus conservative about the economic outlook, Wu said.

On a positive note, rising imports of machinery and electrical equipment, and an increase in housing construction projects last month suggested an improvement in private investments, in addition to the increase in the investments by returning Taiwanese firms, Wu said.

In terms of external demand, Wu said that the US-China trade dispute helped lift Taiwan’s exports last month, but protectionism remains and continues to pose a negative effect on global trade.

As the price of Brent crude oil rose above US$70 a barrel early this month, Wu said that rising oil prices could lend support to exports in the chemical, plastic and rubber industries.

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