In October 2006, Taiwan's business indicators showed a slackening on the real side of the economy. Among the indicators compiled by the Cabinet's Council for Economic Planning and Development (CEPD), the leading index and the coincident index decreased 1.2% and 0.4%, respectively, from the previous month. The monitoring indicators signaled "yellow-blue" for the fifth successive month. Despite strengthening tendency in monetary and financial indicators, most other indictors appear weaker.
1. Leading Indicators. The leading index stood at 108.9 (2001=100), decreasing 1.2% from September, based on revised data. Among the seven indicators that made up the composite index, two that made positive contribution were stock prices* and money supply M1B*. Five that made negative contribution were wholesale price change from six months earlier, customs-cleared exports*, average work hours in the manufacturing sector, floor area of building construction permits, and manufacturing new orders*.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 109.2 (2001=100), decreasing 0.4% from September, based on revised data. Among the six indicators that made up the composite index, three that made positive contribution were average monthly wage of manufacturing workers*, bank clearings*, and manufacturing sales. Two that made negative contribution were industrial production* and manufacturing production*. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score in September was revised to 22, following a downward adjustment in exports. The total score in October decreased 2 points to 20, flashing the signal of "yellow-blue" for the fifth consecutive month. Among the nine indicators, two showed loss in their individual light signals. The fall was recorded in exports and non-agricultural employment. The light signals for money supply M1B, direct and indirect finance, bank clearings and remittance, stock prices, industrial production, manufacturing new orders, and manufacturing inventory remained unchanged.
4. Business Expectations. The October survey of manufacturers indicated that 7% of the respondents expected the economy to become better over the next three months, down from the revised 8% a month earlier, while another 17% held a negative view, down from the revised 24% a month earlier; and 76% of the manufacturers surveyed expected the economy’s performance to remain unchanged, up from the revised 68% in September.
The next release is scheduled for December 27, 2006