The overall monitoring indicators for the nation’s economic climate flashed “yellow-red” last month for a second month in a row, with the index at 37 points, indicating a steady economic recovery, the Council for Economic Planning and Development (CEPD) said yesterday.
Among the index’s nine components, non-agricultural employment and direct and indirect finance remained blue, but the former saw 0.2 percent growth after a contraction of 0.6 percent in November, the CEPD report showed.
Direct and indirect finance saw an increase of 1.5 percent, up 0.6 percentage points from 0.9 percent in November, the report said.
“Although the overall signal remained yellow-red last month, that shouldn’t be interpreted as overheating,” said Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department. “The comparison base from the previous year was low.”
The score came close to the 38 point threshold for a red light, which represents overheating.
Hung said that the growth of non-agricultural employment last month showed the ailing job market was improving, which bodes well for the entire economy.
The composite leading index, used to portray the landscape one to two quarters ahead, gained 0.9 percentage points to 104.6 points, but its annualized six-month rate of change dropped to 19.9 percent, down 1.1 percentage points from a month earlier, the CEPD said.
Hung said the decline indicated the economic recovery had slowed.
Among the factors in the leading index, the semiconductor book-to-bill ratio, the real monetary aggregate M1B and the producers’ inventory index contracted from a month earlier, the report said.
The coincident index stood at 104.8 points, up 2 percentage points from a month earlier, while its trend-adjusted index rose for the 11th consecutive month, up 2.2 percentage points to 106.4 points.
Apart from sales in the wholesale, retail and food services sectors, all the other coincident indicators grew month-on-month.
Looking ahead, Hung said amid the modest global economic recovery, external demand and domestic investment and consumption would likely increase.
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