In November 2006, Taiwan's business indicators showed signs that the recent easing of economic expansion may be tailing off. Among the indicators compiled by the Cabinet's Council for Economic Planning and Development (CEPD), the leading index decreased 0.1% and the coincident index remained at the same level of the previous month. The monitoring indicators signaled "yellow-blue" for the sixth successive month. Despite the levelling off in the downward movement of most indicators, it remains to be observed whether there is sufficient positive momentum being gathered for an upturn.
1. Leading Indicators. The composite leading index stood at 109.0 (2001=100), decreasing 0.1% from October, based on revised data. Among the seven indicators that made up the composite index, five that made positive contribution were manufacturing new orders*, floor area of building construction permits, average work hours in the manufacturing sector, stock prices* and money supply M1B*. Two that made negative contribution were wholesale price change from six months earlier, customs-cleared exports*.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 109.7 (2001=100), remaining at the same level as October, 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 manufacturing production* , industrial production* and bank clearings*. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score in November remained the same as the previous month, flashing the "yellow-blue" signal for the sixth consecutive month. Two of the nine indicators showed changes in their individual light signals, with non-agricultural employment recording a fall and stock prices recording a gain. The light signals for money supply M1B, direct and indirect finance, bank clearings and remittance, industrial production, exports, manufacturing new orders, and manufacturing inventory remained unchanged.
4. Business Expectations. The November survey of manufacturers indicated that 12% of the respondents expected the economy to become better over the next three months, up from the revised 6% a month earlier, while another 19% held a negative view, same as the October survey; and 69% of the manufacturers surveyed expected the economy’s performance to remain unchanged, down from the revised 75% in October.
The next release is scheduled for January 26, 2007