The government’s business climate monitor last month flashed “red,” indicating a boom for the nation’s export-oriented economy thanks to strong demand for semiconductors and servers used in artificial intelligence (AI) devices, the National Development Council (NDC) said yesterday.
It is the first boom in 30 months after the monitor gained 2 points month-on-month to 38, just enough to turn the signal from “yellow-red” to “red,” partly helped by non-technology sectors that have emerged from inventory adjustments and eased an imbalanced recovery, NDC Economic Department Director Chiu Chiu-ying (邱秋瑩) said.
The boom came after the reading on exports rose 2 points and the overtime measure in the industrial and service sectors moved up 1 point, offsetting the loss of 1 point on business confidence among manufacturers, the council said.
Photo: CNA
“The momentum should sustain for the rest of this year with the high sales season for technology products approaching,” Chiu said.
The AI frenzy would likely spread from cloud-based data centers to smartphones and personal computers after technology brands release next-generation gadgets in September, thereby ramping up business at local firms, she said.
Shipments of information and communications technology products last month spiked more than twofold on the back of avid spending on AI infrastructure by US technology giants, she added.
At the same time, exports of mineral, chemical, textile and machinery products posted double-digit percentage increases, while shipments of plastic and base metal products resumed growth, although at a slower pace, Chiu said.
The data showed that the ongoing economic rebound is no longer limited to the technology sector, she said.
The index of leading indicators, which aims to project the economic landscape in the next six months, increased 0.7 percent month-on-month to 103.59, rising for nine straight months with a cumulative expansion of 4.6 percent, the council said.
The subindices on export orders, imports of semiconductor equipment, share prices and labor accession rates all posted encouraging signs, it said, adding that the measure on construction floor space proved the only exception.
The index of coincident indicators, which reflects the current economic situation, climbed another 1.43 percent to 105.53, as component measures on exports, electricity use, industrial output and overtime, as well as wholesale, retail and restaurant revenues all showed positive cyclical movements, the council said.
Looking ahead, end-market demand would continue to improve, as inventory adjustments come to an end for most sectors, Chiu said.
However, local firms should remain cautious about uncertainties linked to November’s US presidential election and the US Federal Reserve’s monetary policy intentions, as they have important bearings on global trade, she said.
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