Taiwan’s business climate monitor stayed “green” for the fourth consecutive month last month, signaling steady economic momentum, despite widening disparities across industries, the National Development Council (NDC) said yesterday.
The composite index gained one point from July to 30, as stronger production and exports offset weakness in traditional sectors, which came under pressure from US tariffs and intensifying global competition, the council said.
The NDC uses a five-color system to illustrate economic conditions: “green” indicates stable growth, “red” reflects a boom and “blue” signals recession, while dual colors denote transition.
Photo: CNA
Of the nine components, stock prices and M1B money supply each added one point, buoyed by a market rebound, while the manufacturing sales index slipped by one point, as tariff impacts started to emerge, NDC Department of Economic Development Director Chen Mei-chu (陳美菊) said.
“The trend is expected to be sustainable, keeping the business climate measure in the ‘green’ range for the rest of the year,” Chen said.
The leading index, which projects economic conditions over the next six months, fell for a seventh straight month to 99.59, down 0.24 percent from July, the council said.
Weaker momentum in new construction, manufacturing business sentiment, export orders and net hiring weighed on the gauge, although money supply, stock prices and imports of semiconductor equipment improved, the NDC said.
The coincident index, which reflects the current state of the economy, edged up 0.26 percent to 106.52, advancing for the 27th straight month, supported by exports, electricity consumption and overtime hours, the council said.
However, retail, wholesale and restaurant revenues, industrial production, machinery imports and manufacturing sales all declined, it said.
Financial conditions brightened after US President Donald Trump pledged to exempt semiconductor firms with US investments from tariffs and the US Federal Reserve signaled willingness to cut interest rates to support the labor market, Chen said.
Trade and sales-related indicators showed resilience, but private consumption remained subdued in light of lackluster retail and restaurant turnover, she added.
A divergence is increasingly emerging between high-tech and traditional industries, she said.
Artificial intelligence (AI)-fueled demand is propelling semiconductor and the information and communications technology industries, but traditional sectors are grappling with tariff headwinds, slower production and mounting furlough cases, Chen said.
Although the latest manufacturing index edged up, firms remain uneasy about US tariffs, she said.
Chen said that Taiwan’s economy should stay resilient through the end of the year, supported by robust AI demand and strong capacity utilization at major technology firms, but geopolitical tensions and trade risks warrant close monitoring.
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