The government’s business climate monitor last month signaled “yellow-blue” for the 10th consecutive month as exports fell and business confidence waned, suggesting an extended soft patch without an evident sign of deterioration, the National Development Council (NDC) said yesterday.
“The latest data show that the economy, while stable, is not strong enough to shake off sluggish growth,” NDC research director Wu Ming-huei (吳明蕙) said, but added that there were not any signs of a downturn either.
The council uses a five-color system to depict the state of the economy, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors indicate a transition.
Exports, which have a heavy weighting in GDP makeup, declined 1.5 percent last month, but might recover modestly this month on the back of the peak season for critical components used in consumer electronics and technology products, the Ministry of Finance said earlier this month.
Overall business confidence dropped slightly as some companies became more optimistic, but many expect moderation after the end of a peak season, a Taiwan Institute of Economic Research (台灣經濟研究院) survey found.
The biggest uncertainty is a trade dispute between the US and China, which has pulled the manufacturing purchasing managers’ indices in China, Japan and the eurozone into contraction territory, the council said.
That suggests a tough external environment that might weigh on Taiwanese exports, Wu said.
Fortunately, local semiconductors firms have bought capital equipment to upgrade technology and capacity, propelled by the deployment of 5G networks, Wu said.
Other firms lent support by moving production lines back home to avoid punitive tariffs imposed on Chinese goods by Washington, boosting private investment, she said.
The leading index series, which aims to project the economic picture for the next six months, inched up 0.17 percent to 102.14, supported by better readings on semiconductor equipment imports, export orders, stock prices and new construction floor areas, the council said.
The coincident index series, which reflects the current economic situation, rose 0.11 percent to 100.07, thanks to better machinery imports, industrial production as well as wholesale, retail and restaurant revenues, it said.
The consumer confidence index weakened 0.6 points to 80.37, as people turned conservative about stock investments, while becoming more confident about the economy, durable goods purchases and household income, a survey by National Central University showed yesterday.
However, people are less optimistic about the job market and have a negative view of the local stock market, as the TAIEX has rallied to 30-year highs of above 11,600 points, the survey found.
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