The nation’s business climate monitor last month showed signs of a slowdown, but exports and imports of capital equipment gained momentum ahead of the high season for technology products, the National Development Council said yesterday.
The monitor remained “yellow-blue” for the sixth consecutive month, despite climbing 3 points, which indicates that the economy is sluggish but improving, it said.
It would not be an exageration to call private investment “the main growth driver,” council research director Wu Ming-huei (吳明蕙) told a media briefing.
Imports of capital equipment last month grew at their fastest pace in 32 months, as local semiconductor firms increased their capital expenditure to stay ahead of global rivals and take advantage of business opportunities linked to 5G technology, the council said.
The council uses a five-color system to describe the state of the economy, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors indicate a transition.
“While trade frictions and other uncertainties linger, Taiwan’s economy will fare better in the second half than the first half,” Wu said.
Exports grew last month, ending seven straight months of contraction, and might continue to recover, as international technology brands are due to unveil new devices in the fall to spur replacement demand, the council said.
The leading index series, which seeks to predict the economic picture for the next six months, rose 0.33 percent to 102.42 points, thanks to an increase in semiconductor equipment imports, construction floor area and stock prices, it said.
The sub-index for retail, wholesale and restaurant businesses posted negative cyclical movements, the council said.
The coincident index series, which reflects current economic conditions, increased 0.01 percent to 98.27 points, reversing 16 months of decline after exports and industrial output gained value, it said.
However, the sub-indices for electricity usage, non-farm employment and sales of manufactured goods were not out of the woods yet, it said.
The council expects benefits from a realignment of the supply chain to be more evident in coming quarters. The government has received more than 90 applications from companies wanting to move their production lines home from China, with investments totaling more than NT$400 billion (US$12.87 billion), the council said.
The government’s subsidies for domestic travel and home appliance purchases would also boost consumer spending, Wu said.
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