The nation’s economic picture showed more clear and stable signs of recovery last month as the leading economic indicators rose for the eighth month in a row with all seven components moving up, the Council for Economic Planning and Development (CEPD) said yesterday.
The index of leading indicators, used to project the economic landscape three to six months ahead, gained 1.7 percent from August to 101 points last month, while the annualized six-month rate of change advanced 3.3 percentage points, the CEPD report showed.
The total score of monitoring indicators for last month was 19 points, up from 18 points in August and flashed a fourth consecutive “yellow-blue light” that indicated the economy was in a transitional period of shifting from slowdown to steady growth, the report said.
CAUTIOUS OPTIMISM
“We are cautiously optimistic the economy will further improve in coming months, propped up by better external demand,” Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a media briefing.
Hung attributed his measured confidence to the fact that the annual decline in export orders narrowed to 3 percent last month, while total value exceeded US$30 billion, about the same level they were at before the recession.
The semiconductor book-to-bill ratio has increased, the report said.
The sub-index has surpassed the benchmark for three consecutive months, standing at 1.17 last month, from 1.06 a month earlier, the report said.
If the value is greater than 1, it means a firm has more orders than it can deliver.
FUNDAMENTALS
“Economic fundamentals showed noted improvement, although they were still outperformed by the financial front,” Hung said.
The stock price index expanded 18 percent year-on-year last month, from a 3 percent decline a month earlier, chiefly because of a low base, the report said.
The index of coincident indicators, used to reflect current economic conditions, rallied 1.7 percent to 96.6 points, while the trend-adjusted reading rose 2.1 percent to 101.4, the report said.
Wu Ming-huei (吳明蕙), chief of the council’s research division, said a value above 100 indicates recovery and it was the first time the adjusted coincident index met the test following the slump.
“Except for real manufacturing sales that dropped 10.4 percent from last year, all other indicators either eased to single digits or moved back to positive territory,” Wu said.
Electric power consumption, industrial production, export shipments, imports of capital goods as well as wholesale, retail and food services data all grew, it said.
The decline in nonagricultural employment decelerated to 1.5 percent from last year, from 2 percent a month earlier, the report said.
Both leading and coincident indexes are set to climb higher this quarter owing partly to a low base last year, Wu said.
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