The economy has stayed on track for a stable recovery so far this year as manufacturers last month increased their purchasing activity and property transactions saw a robust upturn.
The government’s business climate monitor flashed a “green” light for the seventh consecutive month in January, reflecting growth in economic bellwethers, especially industrial production, the National Development Council said yesterday.
The Nikkei Taiwan purchasing managers’ index (PMI) hit 54.5 last month, slightly lower than January’s 55.6, but still comfortably above the neutral mark, as manufacturers saw solid increase in business orders, according to a survey by IHS Markit.
The PMI gauges the health of the manufacturing industry; scores greater than 50 indicate expansion while those below suggest contraction.
“Taiwan’s manufacturing sector expanded at a robust pace last month, driven by broad-based demand in both domestic and international markets,” IHS Markit economist Annabel Fiddes said in a news release.
The upturn in purchasing activity raises the prospect of continued production growth in coming months, despite a mild retreat in momentum, Fiddes said.
IHS Markit expects Taiwan’s GDP to grow 1.7 percent this year, up from 1.4 percent last year, which is lower than the 1.92 percent growth that the Directorate-General of Budget, Accounting and Statistics forecast on Feb. 15.
In related developments, the government’s business climate index gained one point to reach 29 in January, the council said.
The monitory system saw volatile movements in January, with the gauge on industrial production turning from “green” to “red,” suggesting overheating, National Development Council Director Wu Ming-huei (吳明蕙) said.
The council uses a five-color system to describe the nation’s economy, with a blue indicating recession, green suggesting a stable state and dual-color signs reflecting changing gears.
Wu said the system is likely to turn yellow-red next time as the economy is improving.
The leading index series rose 0.37 percent to 101.76 in January while the concurrent index increased 0.93 percent to 105.4, the council said.
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