Taiwan’s business climate monitor continued to indicate a boom for the fourth consecutive month last month, although the score fell for the first time in 10 months, the National Development Council (NDC) said yesterday.
The council measures the nation’s economic health using a five-color system, with “blue” (9-16 points) indicating a recession, “green” (23-31) suggesting steady growth and “red” (38-45) signaling a boom. “Yellow-red” (32-37) reflects a slight boom, while “yellow-blue” (17-22) shows sluggishness.
The monitor last month decreased two points from the previous month to 39, the NDC said in a report.
Photo: CNA
Among the indicator’s nine components, the reading on average overtime hours in the industrial and service sectors turned from “red” to “yellow-red” due to Lunar New Year holiday-related distortions, the report said.
The manufacturing sector’s business climate index also shifted from “green” to “yellow-blue” as more firms became cautious about the Middle East conflict, while the reading on the M1B money supply remained “green,” it said.
The remaining six readings — the TAIEX, the industrial production index, the index of manufacturing sector sales, the custom-cleared exports, imports of machinery and electrical equipment, and retail and wholesale trade — were also unchanged at “red,” it added.
Meanwhile, the trend-adjusted leading index, which gauges the economy’s direction in the next six months, decreased 0.14 percent to 102.58, down for the second consecutive month, the report said.
The trend-adjusted coincident index, which tracks the pace of economic activity, climbed 1.77 percent to 109.26, increasing for the seventh consecutive month, it said.
“The leading index turned downward, while the coincident index continued to rise, indicating that the local economy maintained steady growth, but subsequent changes need to be monitored,” it said.
The council’s report came as data for the first quarter of this year remained strong, with exports surging 51.1 percent year-on-year, while industrial production expanded 24.63 percent and manufacturing output jumped 26.52 percent.
Meanwhile, wholesale trade surged 25.6 percent and retail sales rose 2.1 percent from a year earlier during the quarter.
Looking ahead, exports are expected to maintain high growth momentum, driven by global cloud service providers’ continued artificial intelligence (AI) infrastructure buildup, shipments of next-generation computing products, and fast development of agent AI and edge AI applications, the report said.
Growth momentum in private investment is also projected to remain steady, as major domestic semiconductor companies increase their capital expenditures, supply-chain firms accelerate factory expansion and facility upgrades, and enterprises continue to invest in digital and net-zero transformation, it said.
Meanwhile, the stable domestic job market, the wealth effect brought by the stock market rally, and government subsidies for housing and tax exemptions are likely to boost people’s purchasing power, the report said.
Overall, the council expects the economy to remain stable in the second quarter.
However, the implications of the Middle East conflict, US trade policy and inflation warrant close observation, it said.
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