In January 2006, Taiwan's business indicators continued to display upturns 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 increased 0.1% and 0.9%, respectively, from the previous month. The monitoring indicators flashed "green" for the sixth consecutive month in January, reflecting the steadily gathering momentum of the economy.
1. Leading Indicators. The leading index stood at 109.9 (2001=100), increasing 0.1% from December, based on revised data. Among the seven indicators that make up the composite index, five that made positive contribution were floor area of building construction permits, stock prices*, money supply M1B*, manufacturing new orders* and average work hours in the manufacturing sector. Two that made negative contribution were wholesale price change from six months earlier and customs-cleared exports*.
(Note: components marked with an asterisk indicate year-on-year change rate)
2. Coincident Indicators. The coincident index stood at 115.8 (2001=100), increasing 0.9% from December, based on revised data. Among the six indicators that make up the composite index, three made positive contribution. Those showed improvement were industrial production*, bank clearings*, and manufacturing production*. Two that made negative contribution were average monthly wage of manufacturing workers* and manufacturing sales. Domestic freight was not included due to data availability.
3. The Monitoring Indicators. The total score in December 2005 was revised upward by one point to 27 points, following the revision of manufacturing inventory-to-sales ratio. In January 2006, the score rose 2 points further to 29. The increase is solely attributable to much faster expansion in bank clearings and remittances. Money supply M1B, direct and indirect finance, stock prices, manufacturing new orders, customs-cleared exports, industrial production, manufacturing inventory and non-agricultural employment remained unchanged.
4. Business Expectations. The January survey of manufacturers indicated that 17% of manufacturing businesses expected the economy to be better over the next three months, up from the revised 13% a month earlier, while another 19% held a negative view, up from 18% a month earlier; and 64% of the manufacturers surveyed expected the economy’s performance to remain unchanged, down from the revised 69% in the December survey.
The next release is scheduled for March 27, 2006