In December 2006, Taiwan's business indicators dampened hopes of an economic upturn. Among the indicators compiled by the Cabinet's Council for Economic Planning and Development (CEPD), the leading index and the coincident index decreased 1.1% and 0.4%, respectively. The monitoring indicators flashed the first "blue" signal in 44 months since the shock of the SARS epidemic. However, it remains to be observed whether the latest changes are likely to persist and develop into trends.
- Leading Indicators. The composite leading index stood at 107.8 (2001=100), decreasing 1.1% from November. Among the seven indicators that made up the composite index, two that made positive contribution were manufacturing new orders* and average work hours in the manufacturing sector. Five that made negative contribution were customs-cleared exports*, wholesale price change from six months earlier, floor area of building construction permits, money supply M1B* and stock prices*.
(Note: components marked with an asterisk indicate year-on-year change rate)
- Coincident Indicators. The coincident index stood at 109.1 (2001=100) , decreasing 0.4% from November, based on revised data. Among the six indicators that made up the composite index, two that made positive contribution were manufacturing sales and average monthly wage of manufacturing workers*. Three that made negative contribution were bank clearings*, industrial production* and manufacturing production*. Domestic freight was not included due to data unavailability.
- The Monitoring Indicators. The total score in December decreased 5 points to 16, flashing the "blue" signal (recession) to end a sixth-month period of "yellow-blue." Among the components, stock price, bank clearings and remittances, and industrial production each lost 1 point, and exports lost 2 points. The light signals for money supply M1B, direct and indirect finance, manufacturing new orders, manufacturing inventory, and non-agricultural employment remained unchanged.
- Business Expectations. The December survey of manufacturers indicated that 17% of the respondents expected the economy to become better over the next three months, up from the revised 11% a month earlier, while another 19% held a negative view, down from the revised 20% a month earlier; and 64% of the manufacturers surveyed expected the economy's performance to remain unchanged, down from 69% in November.
The next release is scheduled for February 27, 2007