In July 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 index decreased 0.5% while the coincident index increased 1.5%, from the previous month. The monitoring indicators flashed "yellow-blue" for the second consecutive month, reflecting decelerations in major financial indicators despite continued buoyancy in the real side of the economy.
1. Leading Indicators. The leading index stood at 110.2 (2001=100), decreasing 0.5% from June, based on revised data. Among the seven indicators that made up the composite index, two that made positive contribution were wholesale price change from six months earlier and manufacturing new orders*. Five that made negative contribution were money supply M1B*, average work hours in the manufacturing sector, stock prices*, customs-cleared exports*, and floor area of building construction permits.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 112.7 (2001=100), increasing 1.5% from June, based on revised data. Among the six indicators that made up the composite index, four that made positive contribution were industrial production*, bank clearings*, manufacturing sales, and manufacturing production*. One that made negative contribution was average monthly wage of manufacturing workers*. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score increased 1 point to 22 in July from June, flashing the signal of "yellow-blue" for the second consecutive month. Among the nine indicators, three showed changes in their individual light signals, two with gains and one with loss. The improvement was recorded in industrial production and non-agricultural employment, while the fall was recorded in money supply M1B. The light signals for direct and indirect finance, bank clearings and remittance, stock prices, manufacturing new orders, customs-cleared exports, and manufacturing inventory remained unchanged.
4. Business Expectations. The July survey of manufacturers indicated that 16% of the respondents expected the economy to become better over the next three months, up from the revised 14% a month earlier, while another 13% held a negative view, down from the revised 17% a month earlier; and 71% of the manufacturers surveyed expected the economy’s performance to remain unchanged, up from 69% in the June survey.
The next release is scheduled for September 27, 2006