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Taiwan Business Indicators in August 2006

In August 2006, Taiwan's business indicators displayed mixed signals of the economy. Among the indicators compiled by the Cabinet's Council for Economic Planning and Development (CEPD), the leading and the coincident indexes decreased 0.2% and 1.9%, respectively, from the previous month. The monitoring indicators flashed "yellow-blue" for the third consecutive month, reflecting a deceleration in economic growth despite continued buoyancy in exports, production and employment.

1. Leading Indicators. The leading index stood at 110.3 (2001=100), decreasing 0.2% from July, based on revised data. Among the seven indicators that made up the composite index, four that made positive contribution were average work hours in the manufacturing sector, customs-cleared exports*, stock prices*, and manufacturing new orders*. Three that made negative contribution were floor area of building construction permits, wholesale price change from six months earlier, and money supply M1B*.
(Note: components marked with an asterisk indicate year-on-year change rate)

2. Coincident Indicators. The coincident index stood at 110.6 (2001=100), decreasing 1.9% from July. Among the six indicators that made up the composite index, five that made negative contribution were bank clearings*, manufacturing production*, industrial production*, manufacturing sales, and average monthly wage of manufacturing workers*. Domestic freight was not included due to data unavailability.

3. The Monitoring Indicators. The total score in July was adjusted to 21 from 22, following a downward revision in industrial production. The total score in August increased 1 point to 22, flashing the signal of "yellow-blue" for the third consecutive month. Among the nine indicators, exports improved further and resulted in a change in its individual light signals. The improvement was recorded in and while the fall was recorded in. The light signals for money supply M1B, direct and indirect finance, bank clearings and remittance, stock prices, manufacturing new orders, industrial production, manufacturing inventory and non-agricultural employment remained unchanged.

4. Business Expectations. The August survey of manufacturers indicated that 14% of the respondents expected the economy to become better over the next three months, down from the revised 18% a month earlier, while another 21% held a negative view, up from 13% a month earlier; and 65% of the manufacturers surveyed expected the economy’s performance to remain unchanged, down from the revised 69% in the July survey.

The next release is scheduled for October 27, 2006 


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    1. Taiwan Business Indicators in August 2006
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