Taiwan’s economy remained sluggish for the 10th consecutive month in October amid lingering concerns over trade friction between the United States and China, the National Development Council (NDC) said Wednesday.
However, the country’s leading indicators, which predict economic performance over the next three to six months, bucked the downturn, moving higher in the month, the NDC said.
The composite index of monitoring indicators for October fell to 18 points from 19 recorded in September, representing a yellow-blue light and pointing toward sluggishness, according to data compiled by the NDC, Taiwan’s top economic planning agency.
The NDC uses a five-color system to gauge the country’s economic performance, with blue indicating economic recession, yellow-blue representing sluggishness, green signifying stable growth, yellow-red referring to a warming economy and red pointing to overheating.
Of the nine factors in the composite index, the sub-indexes on industrial production and merchandise exports flashed blue, retreating from a yellow-blue light in September, the NDC said.
The council said the sub-indexes on non-farm payrolls and sales generated by the local manufacturing sector continued to flash a blue light, while the index on business sentiment among Taiwanese manufacturers also flashed a blue light in October, compared with a yellow-blue in September.
In the same month, the sub-index on revenue posted by the wholesale, retail, and food and beverage sectors continued to flash a yellow-blue light, while the sub-index on equity price changes flashed yellow-red, an improvement from the yellow-blue light of a month earlier, the NDC said.
In addition, the sub-index on imports of machinery and electrical equipment again flashed a yellow-red light in October, while the sub-index on money supply continued to flash a green light for the month, the NDC added.
It said the leading indicators rose 0.17 percent from a month earlier in October, marking the 10th consecutive month of increase.
Among the seven factors of the leading indicators, the sub-indexes on real imports of semiconductor production equipment, employment, equity prices and floor areas of housing starts moved higher in the month, the NDC said.
However, the sub-indexes on export orders, business sentiment in the local manufacturing sector and money supply moved lower, the NDC added.
Wu Ming-hui (吳明蕙), head of the NDC’s Department of Economic Development, said that although the composite index remained sluggish, the leading indicators still improved, so that the local economy showed no signs of deterioration.
According to Wu, the aggregate growth of the leading indicators over the past 10 months has been only 2.33 percent.
Wu said investments in capital equipment and semiconductor production equipment continued to increase, which is expected to serve as an anchor for the local economy, so the NDC remained confident in the situation.