The government’s business climate monitor last month flashed “green,” as the economy emerged from five months of slowdown caused by the COVID-19 pandemic, the National Development Council said yesterday.
Almost all component measures registered positive cyclical movements except for the nonfarm payroll, which remained sluggish, council research director Wu Ming-huei (吳明蕙) told a news conference in Taipei.
“The latest data suggest the economy finally resumed stable growth after the pace of uptick grew increasingly evident,” Wu said.
The total score gained 5 points to 26, catapulting the monitor to the growth zone of 23 to 31.
The council uses a five-color system to portray the nation’s economic state, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors mean it is in transition.
The council is to continue closely monitoring the economy at home and abroad to see if the growth is sustainable or just an isolated episode, Wu said.
The worst is over, but uncertainty warrants continued caution, Council Deputy Minister Cheng Cheng-mount (鄭貞茂) said.
Many are concerned about a potential resurgence of COVID-19 infections in the fall and winter, Cheng said, adding that the US presidential election and US-China trade dispute could shake up the economy.
The index of leading indicators, used to gauge the economic outlook in the coming six months, rose 1.72 percent to 104.67, bolstered by better export orders, manufacturing sentiment, labor accession rates and new construction floor space, the council said.
The sub-index on semiconductor equipment imports was the only measure that posted negative cyclical movement from one month earlier, it said.
Altogether, the leading indicators’ series have picked up for the past five months, which is a positive sign, Wu said.
The index of coincident indicators, which reflects the current economic situation, edged up 0.71 percent for the third consecutive month to 100.77, the council said.
Exports, industrial output and power consumption, as well as wholesale, retail and restaurant revenues, showed improvement, but employment and machinery equipment imports lost some traction, it said.
Although the coincident indicators’ series climbed 1.55 percent for three months in a row, the magnitude of increase was not strong enough to suggest a concrete recovery, Wu said.
It is more urgent that local firms upgrade and adapt to new business models in the post-pandemic era so that economic activity can recover better momentum, Cheng said.
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