In February 2006, Taiwan's business indicators displayed mixed signals 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 increased 0.1% and the coincident index decreased 0.5% from the previous month. The monitoring indicators flashed "green" for the seventh consecutive month in February, reflecting the steadily gathering momentum of the economy.
1. Leading Indicators. The leading index stood at 109.6 (2001=100), increasing 0.1% from January, based on revised data. Among the seven indicators that make up the composite index, three that made positive contribution were manufacturing new orders*, wholesale price change from six months earlier, and customs-cleared exports*. Four that made negative contribution were stock prices*, money supply M1B*, floor area of building construction permits, 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 114.2 (2001=100), declining 0.5% from January, based on revised data. Among the six indicators that make up the composite index, one that made positive contribution was average monthly wage of manufacturing workers*. Four components that made negative contribution were bank clearings*, manufacturing sales, industrial production*, and manufacturing production*. Domestic freight was not included due to data unavailability.
3. The Monitoring Indicators. The total score in January was revised downward by one point to 28 points, following the revision of industrial production. In February, it continued to be 28. The individual score of components -- money supply M1B, direct and indirect finance, bank clearings and remittance, stock prices, manufacturing new orders, customs-cleared exports, industrial production, manufacturing inventory and non-agricultural employment remained unchanged.
4. Business Expectations. The February survey of manufacturers indicated that 30% of manufacturing businesses expected the economy to be better over the next three months, up from the revised 19% a month earlier, while another 11% held a negative view, down from the revised 18% a month earlier; and 59% of the manufacturers surveyed expected the economy’s performance to remain unchanged, down from the revised 63% in the January survey.
The next release is scheduled for April 27, 2006