Taiwan's Economy Stable in February

The National Development Council (NDC) uses a five-color system to gauge the country's economic performance, with blue indicating economic recession, yellow-blue representing sluggishness, green signifying stable growth, yellow-red referring to a warming economy and red pointing to overheating.

Out of the nine factors in the composite index for February, the sub-indexes on money supply and sales posted by the manufacturing sector both flashed another green light, while the sub-index on industrial production flashed a green light, compared with a red-yellow light a month earlier, the NDC said.

The sub-index on exports in merchandise and services flashed a green light in February, improving from a yellow-blue light a month earlier, while the sub-index on equity price changes flashed a yellow-red light, compared with a red light a month earlier, the NDC added.

In February, the NDC said, the sub-index on imports on machinery and electrical equipment continued to flash a yellow-red light, while the sub-index on revenue generated by the wholesale, retail and food/beverage industries flashed a yellow-blue light, improving from a blue light.

The sub-index on non-farm payrolls continued to flash a blue light in February, while the sub-index on business sentiment of the manufacturing sector flashed a blue light, a downgrade from a yellow-blue light a month earlier, according to the NDC.

As for the leading indicators, which fell 0.16 percent to 101.33 in February, the NCD said the magnitude of the fall appeared to expand in the past four months amid the COVID-19 pandemic. The decline in February was tied with January's 0.16 percent fall and steeper than December's 0.12 percent and November's 0.01 percent drop.

Among the seven factors on the leading indicators, the NDC said, the sub-indexes on imports of semiconductor production equipment, equity prices, money supply and the floor areas of new construction projects moved higher in February, while the sub-indexes on export orders, business sentiment of the local manufacturing sector and employment moved lower in the month.

Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said although the local economy flashed another green light in February, with the COVID-19 spread worldwide escalating, she remained cautious about the negative impact on the local economy imposed by the disease in March and going forward.

Wu said since the virus contagion in the United States and Europe, two of the major buyers of Taiwan-made goods, worsened in March and more countries imposed lockdowns or even closed their borders to limit people movement to contain the spread, global demand has been affected.

As of Friday, the U.S. reported more than 101,000 confirmed COVID-19 cases, topping that in China and Italy, with 1,588 deaths. In Italy, the number of people who died of the virus rose by 969 on Friday, the biggest daily increase since the crisis began, with more than 86,000 confirmed cases reported.

Wu said with many consumers preferring to stay home to avoid infections, retail sales and revenue posted by food and beverage vendors have been moving lower.

In addition, Wu said, the pandemic has created uncertainty over the economy and affected investors' confidence so enterprises here could put their investment plans on hold or reduce their investments.