In June 2006, Taiwan's business indicators displayed signals of slowdown 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 0.2% and 1.2%, respectively, from the previous month. The monitoring indicators flashed "yellow-blue," the first time after ten successive months of "green," signaling decelerations in major economic activities in June.
1. Leading Indicators. The leading index stood at 110.2 (2001=100), decreasing 0.2% from May, based on revised data. Among the seven indicators that made up the composite index, four that made positive contribution were wholesale price change from six months earlier, customs-cleared exports*, average work hours in the manufacturing sector, and floor area of building construction permits. Three that made negative contribution were stock prices*, money supply M1B*, and manufacturing new orders*.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 111.7 (2001=100), declining 1.2% from May, based on revised data. Among the six indicators that made up the composite index, five that made negative contribution were bank clearings*, average monthly wage of manufacturing workers*, industrial production*, manufacturing production*, and manufacturing sales. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score lowered by 3 points to 21 in June from May, changing the overall light signal from "green" to "yellow-blue." Among the nine indicators, five showed changes in their individual light signals, one with gain and four with losses. The improvement was recorded in customs-cleared exports, while the fall was recorded in money supply M1B, stock prices. bank clearings and remittance, and manufacturing new orders. The light signals for direct and indirect finance, industrial production, manufacturing inventory and non-agricultural employment remained unchanged.
4. Business Expectations. The June survey of manufacturers indicated that 16% of the respondents expected the economy to become better over the next three months, down from the revised 18% a month earlier, while another 14% held a negative view, up from the revised 13% a month earlier; and 70% of the manufacturers surveyed expected the economy’s performance to remain unchanged, up from 69% in the May survey.
The next release is scheduled for August 28, 2006