In March 2006, Taiwan's business indicators displayed declines on both the real and financial sides 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 2.3% and 1.1%, respectively, from the previous month. The monitoring indicators flashed “green” for the eighth consecutive month in March, reflecting continued steady expansion of the economy.
1. Leading Indicators. The leading index stood at 107.2 (2001=100), sliding 2.3% from February, based on revised data. All seven indicators that make up the composite index made negative contribution. These are wholesale price change from six months earlier, money supply M1B*, manufacturing new orders*, customs-cleared exports*, floor area of building construction permits, stock prices*, and average work hours in the manufacturing sector.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 113.0 (2001=100), declining 1.1% from February. Among the six indicators that make up the composite index, the only one that made positive contribution was average monthly wage of manufacturing workers*. Four components that made negative contribution were manufacturing production*, industrial production*, bank clearings* and manufacturing sales. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score recorded 23 points in March, down 5 points from February. The loss was attributable to decelerations in money supply M1B, bank clearings and remittance, manufacturing new orders, customs-cleared exports, and industrial production. The light signals for direct and indirect finance, stock prices, manufacturing inventory and non-agricultural employment remained unchanged.
4. Business Expectations. The March survey of manufacturers indicated that 18% of manufacturing businesses expected the economy to be better over the next three months, down from the revised 31% a month earlier, while another 11% held a negative view, up from the revised 10% a month earlier; and 71% of the manufacturers surveyed expected the economy’s performance to remain unchanged, up from 59% in the February survey.
The next release is scheduled for May 26, 2006