Business indicators still show economic expansion: CEPD


The China Post news staff

Taiwan business indicators compiled by the Council for Economic Planning and Development (CEPD) for January 2011 showed continuing economic expansion. The annualized six-month rate of change of the leading index increased 0.2 points in January while the trend-adjusted coincident index increased by 0.9% from the previous month, and the overall monitoring indicator flashed the “yellow-red” signal.

This was the fifth consecutive month for the “yellow-red” signal, indicating Taiwan’s economy is maintaining steady growth. Officials at the planning agency under the Executive Yuan (Cabinet) expressed optimism for more room for growth in the months ahead.

They listed among the positive factors for the coming months: continuous improvements in the sectors of financial services, production, foreign trade, the labor market. The newly emerging industrial countries have also registered robust economic growth while the slowdown of advanced nations is better than forecast earlier. In addition, the government has continued to actively solicit new investments from abroad and expand domestic companies to raise employment in Taiwan. With updated data, the composite leading indicators index moved up by 0.6 percent to reach at 124.8 in January from December last year. The annualized six-month rate of change increased by 0.2 point to 4.2 percent.

Among the seven indicators making up the trend-adjusted index, the index of export orders, stock price index, and building permits had positive cyclical movement from previous month. SEMI book-to-bill ratio, index of producer’s inventory for manufacturing, average monthly overtime in industry and services, and real monetary aggregates M1B had negative cyclical movements from previous month.

The coincident index stood at 134.6 in updated data, up by 1.8 percent from December. Its trend-adjusted index increased by 0.9 percent to 107.6. Among the seven indicators making up the trend-adjusted index, the industrial production index, electric power consumption, sales index of wholesale, retail and food services, nonagricultural employment, index of producers’ shipment for manufacturing and real machineries and electrical equipment imports had positive cyclical movements from previous month.

The real customs-cleared exports had negative cyclical movements from previous month.

For lagging indicators the revised data show the lagging index stood at 132.0, up by 1.6 percent from December.

Its trend-adjusted index rose by 0.6 percent to 105.5. Among the six indicators making up the trend-adjusted index, unemployment rate, loans and investments of major financial institutions, regular employees on payrolls in industry and services, and interbank overnight call-loan rate had positive cyclical movements from previous month.

In the category of monitoring indicators, the total score in December 2010 was adjusted upward by one point to 34, following the revision of manufacturing sales.

January’s total score remained at 34, flashing the “yellow-red” signal for the fifth consecutive month.

Among the nine components, direct and indirect finance gained one point and changed its individual light signal to “green” from “yellow-blue.” Sales index of wholesale, retail and food services gained two points and changed its individual light signal from “green” to “red.”

Stock price, customs cleared exports and imports of machineries and electrical equipments each lost one point and changed their individual light signals from “yellow-red” to “green.”

The light signals for the rest of four components remained unchanged.