The government’s business climate monitor last month changed to “yellow-red” from “red” the previous month, as firms in old economy industries reported a lackluster export recovery, but the overall economy still maintains positive growth momentum, the National Development Council said yesterday.
The council measures the nation’s economic health using a five-color system, with “blue” signaling a recession, “green” suggesting steady growth and “red” indicating a boom. “Yellow-red” reflects a slight boom, while “yellow-blue” shows sluggishness.
The total score of the monitor’s composite index dropped five points from the previous month to 34, the lowest in the past six months, the council said in a report.
Photo: EPA-EFE
That came as the growth momentum among local industries was uneven, with the semiconductor and information technology industries continuing to benefit from an artificial intelligence (AI) boom, while traditional industries such as steel, petrochemicals, textiles and machinery still performed relatively weak, it said.
Among the composite index’s nine components, the readings on custom-cleared exports, and retail and wholesale trade turned from red to green, while the reading on the manufacturing sector’s business climate shifted from green to yellow-blue, the report said.
The remaining six readings — the M1B money supply, the TAIEX, the industrial production index, the average monthly overtime hours of industry and service employees, imports of machinery and electrical equipment, and the index of manufacturing sector sales — remained unchanged, it showed.
Meanwhile, the index of leading indicators, which gauges the economy’s direction in the next six months, rose 0.07 percent month-on-month to 103.35, rising for the 11th consecutive month, and the index of coincident indicators, which tracks the pace of economic activity, climbed 0.77 percent to 105.9, increasing for the 17th consecutive month, it said.
As both the leading and coincident indicators continue rising, the local economy has “undoubtedly” held on to its path of recovery, the council said.
The council said it expects exports to continue growing steadily, as AI-related exports would support domestic tech firms, coupled with restocking demand ahead of the year-end shopping sprees in Europe and the US.
It expects domestic investment to continue gathering speed thanks to the expansion of high-end production capacity by semiconductor firms, and the establishment of research bases and data centers by major global tech giants, as well as investments related to digital transformation and net zero carbon emissions, the council said.
Meanwhile, private consumption is expected to retain strong momentum on the back of stable wage hikes and government subsidies for housing and tax exemptions, it said.
However, the upcoming US presidential election, continued geopolitical risks and more trade barriers set by governments still pose uncertainties ahead, and their effects on Taiwan’s economy deserve close observation, it added.
Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said. At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy. "What really matters is not who pioneers
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
INFLATION CONSIDERATION: The BOJ governor said that it would ‘keep making appropriate decisions’ and would adjust depending on the economy and prices The Bank of Japan (BOJ) yesterday raised its benchmark interest rate to the highest in 30 years and said more increases are in the pipeline if conditions allow, in a sign of growing conviction that it can attain the stable inflation target it has pursued for more than a decade. Bank of Japan Governor Kazuo Ueda’s policy board increased the rate by 0.2 percentage points to 0.75 percent, in a unanimous decision, the bank said in a statement. The central bank cited the rising likelihood of its economic outlook being realized. The rate change was expected by all 50 economists surveyed by Bloomberg. The
RSS