Taiwan economic indicator index hits 4-year high

Taipei, March 30 (CNA) Taiwan's economic monitoring indicator flashed a red light for the third straight month in February, with the composite score rising to its highest level in more than four years, the National Development Council (NDC) said Monday.

The composite index climbed one point from a month earlier to 40, the highest since July 2021, remaining in the red zone that signals an overheating economy.

The NDC uses a five-color system to track the economy. A red light (38-45 points) signals overheating; yellow-red (32-37) indicates a warming economy; green (23-31) suggests stable growth; yellow-blue (17-22) reflects sluggishness; and blue (9-16) points to contraction.

Of the nine monitoring indicator factors, the sub-index on overtime hours in the industrial and service sectors rose two points to red, driven by strong demand for artificial intelligence applications and Lunar New Year-related distortions.

The manufacturing business sentiment indicator fell one point to yellow-blue from green, reflecting fewer working days during the holiday period and more cautious views among firms, the NDC said.

The other seven indicators -- the money supply aggregate M1B, revenue in the wholesale, retail and food and beverage sectors, stock price changes, imports of machinery and electrical equipment, merchandise exports, manufacturing sales, and industrial production -- remained unchanged.

NDC official Chen Mei-chu (陳美菊) said the February score was the highest in over four years, mainly due to a surge in overtime hours, which swung from a 0.7 percent decline in January to a 13.9 percent increase.

In addition to the tech sector, retail and dining businesses also logged longer hours during the nine-day Lunar New Year holiday in mid-February.

Chen said both the index of leading indicators and the coincident index, summarizing existing economic conditions, have continued to rise for eight and 16 consecutive months, respectively, signaling sustained momentum.

Data for January and February combined was also strong, with exports surging more than 40 percent year-on-year and growth in industrial production, manufacturing sales, and wholesale and retail activity remaining solid.

Looking ahead, Chen said demand tied to global AI development is expected to stay strong, supported by continued capital spending by cloud service providers, while exports of non-tech industries could also improve.

She warned, however, that uncertainties persist, including Middle East tensions and potential new U.S. trade measures, which could weigh on the global outlook.