Taiwan’s economy flashed a “red light” for the 10th consecutive month in November as an index gauging the economic climate continued to point to strong growth in the month, the National Development Council (NDC) said Monday.
Data released by the NDC, the top economic planning agency in Taiwan, showed the composite index of monitoring indicators, which reflects the existing economic situation, fell one point from a month earlier to 38 in November. Despite the fall, the figure remains between 38 and 45, which is within the range of a red light indicator.
The 10 months of strong growth is the longest period of solid growth in the local economy since 1984 when the NDC started using its currently calculation model, made up of nine factors.
The council also uses a five-color system to gauge the country’s economic performance, with blue indicating economic contraction, yellow-blue representing sluggishness, green signifying stable growth, yellow-red referring to a warming economy, and red pointing to an overheated or booming economy.
In addition, the leading indicator that gauges the economic climate over the next six months also moved higher by 0.36 percent from a month earlier in November, providing more evidence of a stable local economy, the NDC said.
Wu Ming-hui (???), head of the NDC’s Department of Economic Development, told reporters that Taiwan’s economy continues to benefit from a strong export performance and solid investments.
Among the nine factors in the composite index, the sub-index on merchandise exports rose one point from a month earlier to flash a red light, improving from a yellow-red light seen in October.
However, the sub-indexes on money supply and sales generated by the manufacturing sector dropped one point each from a month earlier to flash a yellow-red light in November, compared with a red light in October.
The fall in money supply came after some electronics firms repaid debts, while the decline in manufacturers’ sales reflected a relatively high comparison base over the same period of last year. “The declines appear minor,” Wu said.
The sub-indexes for the remaining six factors, such as industrial production, share price changes and non-farm payrolls, remained unchanged in November, according to the NDC.
“Taiwan’s industrial production remains strong. More important, many semiconductor firms appear willing to invest more since they remain upbeat about demand,” Wu said, adding that semiconductor equipment imports rose 36 percent from a year earlier in November.
In November, the leading indicator rose for the fifth straight month with four out of the seven sub-indexes — export orders, employment, floor area in new property construction projects and semiconductor equipment imports — moving higher, the NDC said.
Bucking the upturn, the sub-indexes on money supply, stock price changes and business sentiment among manufacturers, moved lower in November, the NDC added.
Over the past five months, the leading indicator has risen 1.92 percent, indicating optimism toward the economic outlook, Wu said.
Looking ahead, Wu said she remained upbeat about the local economic performance at a time of strong global demand, adding there is a chance Taiwan’s economy could flash another red light in December.
However, the NDC also cautioned about the ongoing spread of the COVID-19 Omicron variant, which could create uncertainty for the global economy down the road.
Source: Focus Taiwan News Channel