The business climate monitor in December signaled “blue” for a second straight month, as exports, industrial output and other economic indicators contracted, while consumer spending gained traction, the National Development Council said yesterday.
The total score of nine monitoring indicators was unchanged at 12, reflecting a recession induced by global inflation and monetary tightening, council research director Wu Ming-huei (吳明蕙) said.
“Foreign trade, a key growth driver, would remain weak in the coming months, but might come out of the woods earlier as global inflationary pressures have showed signs of stabilizing,” Wu said.
Photo: CNA
The sub-index on retail, wholesale and dining revenue gained 1 point in December, but imports of electrical and machinery equipment retreated by the same pace, Wu said.
The council uses a five-color system to portray the nation’s economic health, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest transition to a stronger or weaker state.
Rising inflation and interest rate hikes led consumers around the world to cut spending on technology gadgets, prompting major tech titans to shed headcount and manage inventory cautiously, the official said.
This might persist through the first half of this year, but a few steelmakers and electronics suppliers are expecting a turnaround next quarter, encouraged by China’s reopening and swift easing of COVID-19 restrictions.
The index of leading indicators, which projects the economic situation in the coming six months, weakened in December for the 13th straight month, albeit at a milder pace, Wu said, adding that the chance of a rebound is unlikely until the third quarter.
The index has declined 8.1 percent in the past 13 months, council data showed.
The index of coincident indicators, which reflects the current economic situation, shrank 2.08 percent to 92.06, as almost all constituent measures lost value except for the sub-index on non-farm payroll, the council said.
Service providers catering to domestic demand saw a rapid recovery in December, as companies held year-end banquets for employees, Wu said.
The momentum is expected to carry on into this month, as companies organize spring gatherings to celebrate the new year, he said.
In addition, demand for electronics used in high-performance computing, electric vehicles and emerging technology applications should thrive, while inventory corrections linger for smartphones and notebook computers, the council said.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
RSS