Sat, Nov 28, 2015 page13

• Economy likely to have bottomed out

  OPTIMISTIC: The government expects private investment to expand next year, as the semiconductor industry and its supply chain plan to increase production capacities

  • By Lauly Li / Staff reporter
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  Taiwan’s economy has shown signs that it might have bottomed out, as the overall reading for the government’s business monitoring system increased by one point to 15 last month, the National Development Council said yesterday.

  The government’s business monitoring system remained in the “blue” zone for the fifth consecutive month last month, but some of the nine business gauges that make up the monitoring system saw improvements from the previous month, the council said in a statement.

  A “blue” reading means the economy is in recession and “yellow-blue indicates a transition between recession and growth, while a “green” reading means the economy is growing steadily.

  The imports of machineries and electrical equipments last month gained 1 point, which helped change its individual reading from the “yellow-blue” to “green” — a better reading — the council said.

  The M1B money supply, which includes cash and cash equivalents, last month remained unchanged in the “green” zone.

  The M1B reading climbed 6.7 percent on an annual basis, compared with a 6.6 percent year-on-year increase in September, suggesting improving momentum in the financial sector, the council said.

  The leading index, which forecasts the economic conditions for the next three to six months, dropped 0.09 percent to stand at 97.58 last month, representing the 14th consecutive month of decline, the council said.

  The coincident index, which reflects economic conditions also saw a monthly decline of 0.07 percent to retreat to 97.9 points last month, it said.

  However, the council said that the scale of the decline in both indices showed signs of narrowing on a monthly basis.

  “The economy’s outlook is still gloomy for the time being, but the nation might see an uptick in the foreseeable future,” the council said.

  The council said the economy next year is expected to outpace this year, as most of the international research institutes forecast a better global economic growth next year.

  In addition, inventory correction in the electronics industry, which is the pillar of the nation’s manufacturing sector, is likely to conclude before the end of this year and would help exports to recover next year, the council said.

  Private investment should expand next year, as the semiconductor industry and its supply chain are expected to increase investments in expanding production capacity to meet the growing potential of the Internet of Things market, it said.

  The government’s economic stimulus measures would boost domestic demand this quarter through next quarter, the council said.

  However, it said that as the number of people on unpaid leave has been increasing in the past few months, the council would inquire if this would affect the nation’s private consumption.

  Separately, consumer confidence weakened for the seventh consecutive month this month, but sentiment toward the economic climate recovered after falling in the previous six months, according to a survey released by National Central University yesterday.

  According to the survey, the consumer confidence index (CCI) fell 0.4 points from a month earlier to 84.20. The decline was smaller than a month-on-month drop of 0.72 points last month.

  The survey was conducted by the university’s Research Center for Taiwan Economic Development from Thursday last week to Monday by collecting 2,442 questionnaires.

  Among the six composite factors in the CCI, which reflect how consumers feel about different aspects of the nation’s economy in the next six months, only the sub-index for the local economic climate registered a rebound, up 0.35 points from a month earlier, to 76.7.

  The sub-index for the timing of equity market investment fell 1.1 points from last month to 71.4, leading the drop among five composite factors.

  The sub-index for the timing for durable goods purchases this month stood at 101.55 points, down 0.5 points from last month, the sub-index for the local job market dropped 0.45 points to 112.2, while the sub-index for consumer prices dropped 0.4 points to 56.9.

  The sub-index for family finances registered the smallest decline among the five declining factors this month, down 0.3 points to 86.45, the survey showed.

  Additional reporting by CNA
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