The nation’s business cyclical indicators last month flashed a “yellow-blue” light for the second month in a row, with all but one of the leading components rising, reaffirming signs of a pick-up, the Council for Economic Planning and Development (CEPD) said yesterday.
The index of leading indicators, used to gauge the economic outlook for the next three to six months, climbed 2.3 percent to 97.3 points last month, with the annualized six-month rate of change rising 5.7 points to 11.3 percent, the council said.
“The economic indicators rebounded for the sixth consecutive month in July as almost all gauges showed improvements,” Hung Jui-bin (洪瑞彬), director-general of the economic research department, told a press conference.
Hung said the economy had bottomed out, but it would take time to confirm “a recovery.”
Of the seven leading components, six picked up last month, with the semiconductor book-to-bill ratio reporting the strongest improvement by rising to its highest level since January 2007, the CEPD report said.
Producers’ inventory dropped further, suggesting a need for restocking, while average monthly overtime in industry and services rose to six hours, indicating rising demand, the report said.
M1B money supply, which refers to cash in circulation and passbook deposits, surged 20.5 percent year-on-year last month, as people channeled more funds from time savings to demand savings accounts, the report said.
The excess capital helped push the stock market to 6,835 points last month, from 6,496 in June, although the figure represented a 4.1 percent decline from the level last year, the report said.
However, new building permits failed to move upward, even though the total area for newly approved constructions increased to 1.15 million square meters last month, from 983,000m² a month earlier, it said.
Meanwhile, the index of coincident indicators, used to gauge current economic conditions, advanced 2.7 percent to 95.1 points, while its trend-adjusted reading picked up 3.1 percent to 98.7 points, the report said.
CEPD research division chief Wu Ming-huei (吳明蕙) attributed the improvement to stronger custom-cleared exports, industrial production, electric power consumption, as well as wholesale, retail and food services.
However, capital equipment imports and non-agricultural unemployment dipped as companies remained conservative about expansions, Wu said.
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