The government’s business climate monitor last month flashed “green” for the second straight month, as the nation’s export-focused economy steadily gained traction thanks to improving outbound shipments and industrial production, the National Development Council (NDC) said yesterday.
The total score of the composite index of monitoring indicators' nine constituents gained two points to 29 from the previous month, indicating a continued state of recovery, NDC research director Wu Ming-huei (吳明蕙) said.
“Fast-growing global AI [artificial intelligence] demand is benefiting local firms on the supply chain, catapulting the gauges on exports, industrial output and overtime hours to booming territory,” Wu told a news conference in Taipei.
Photo: CNA
The recovery would grow more evident going forward, as inventory adjustments for technology products would come to an end soon, NDC Minister Kung Ming-hsin (龔明鑫) told a meeting of the legislature’s Economics Committee earlier this week.
The council uses a five-color system to capture the nation’s economic state, with “green” indicating steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest a transition to a stronger or weaker state.
The index of leading indicators, which aims to forecast economic conditions in six months, increased 0.60 percent month-on-month to 101.68 last month, as readings on the labor accession rates, export orders, construction floor space, share prices and business confidence displayed positive movements, the council said.
The improvements came even though imports of semiconductor equipment and money supply remained soft, it said.
Semiconductor equipment is important because it sheds light on the capital spending of major local technology firms, as Taiwan is home to the world’s largest supplier of advanced chips.
The index of coincident indicators, which reflects the current economic situation, increased 0.32 percent to 100.40, aided by advances in industrial production and manufacturing sales, as well as wholesale, retail and restaurant revenue, the council said.
By contrast, the reading on electricity usage and export volume declined due to fewer working days, it said.
In related developments, the consumer confidence index this month inched up 0.29 points to 73.51, as people feel more optimistic about stock investment, economic growth and household income, a survey by National Central University showed yesterday.
The sentiment on stock investment rose 1.56 points, as the TAIEX remained above 20,000 points despite capital outflows.
The rising popularity of domestic and foreign exchange-traded funds lent support to the local bourse, said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, which conducted the survey.
Capital flows to exchange-traded funds are not a bad thing, as they are common investment tools around the world and most target diversified blue-chip stocks, making them relatively stable compared with other investment vehicles, Wu said.
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