The government’s business climate monitor flashed “blue” for the ninth consecutive month last month, indicating that the nation’s overall economic state remains weak, despite a couple of gauges logging modest improvement, the National Development Council said yesterday.
The soft patch now appears to be outliving the global financial crisis of 2008 to 2009, which sank the monitoring system into “blue” territory for nine consecutive months and a steep recovery followed.
“The pace of downturn is less drastic this time around, although we have yet to spot signs of a recovery,” council researcher Wu Ming-hui (吳明蕙) said.
The total score for the monitoring system stood at 16 last month, two points higher than January, on the back of better equipment imports and confidence levels among manufacturers, the council’s report said.
RECOVERY TIME
However, component indices on share prices, industrial production, exports and non-farm payroll continued to show negative cyclical movements, the report said.
Wu said it is too early to speculate on a recovery given that leading and concurrent indices have not yet stabilized.
“Blue” indicates economic slowdown or recession while a “green” indicates stability and a “red” indicates a boom.
Wu’s reservations are not unfounded, as export orders contracted 7.4 percent last month from a year earlier, meaning actual shipments would stay in negative territory one to three months after.
The leading index, which aims to predict the economic landscape three to six months ahead, lent support to conservative views, as it registered 96.83 last month, shrinking for the 18th consecutive month, the report said.
Besides export orders, the sub-indices on building permits, share closing prices and money supply also retreated from one month earlier, the report said.
CONDITIONS AHEAD
The concurrent index series, which reflects apparent economic conditions, stood at 97.82, paring 0.44 percent from January and falling for the 16th consecutive month, the report said.
The component indicators on electricity usage, industrial output, non-farm employment, machinery and electrical equipment imports and commercial and retail sales all decelerated last month from one month earlier, the report said.
Looking forward, the monitoring system might improve to “yellow-blue” — or changing gears — next quarter if oil and steel prices show further signs of stabilization, Wu said.
Domestic financial markets appear to have come out of earlier wild swings unharmed judging by current performance, Wu said.
The statistics agency last month forecast a 0.64 percent decline in GDP for this quarter and a 1.02 percent pickup next quarter. The pace of recovery is predicted to hit 2.37 percent in the third quarter and accelerate to 2.98 percent in the fourth quarter.
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