| Chinese | Home |  
Home / Monthly


2017.1.25
The global economy is recovering with uncertainties
TIER adjusts its forecast for growth of 2017 upward

The Taiwanese Economy in December 2016

According to major forecasting institutes around the world, the global economic growth in 2017 will certainly be better than that in 2016. The global economy is recovering with several uncertainties, the potential rise of right wing in Europe, US president Trump's new economic policies, and the Fed's monetary tightening operations. Nevertheless, the world demand is on the rise helping fuel up Taiwan's growth engines. The Taiwan Institute of Economic Research (TIER) adjusts its economic forecast upward by 0.13 percentage points compared with the previous forecast to 1.78%.
Taiwan's exports in December 2016 increased by 13.97% compared with the same month of 2015. Regarding imports, Taiwan's imports in December 2016 increased by 13.21% compared with imports in December 2015. From January 1 to December 31 lasts year, Taiwan's exports and imports gave a trade surplus of US$ 49.46 billion or a increase by 2.87% on a y-o-y basis.
Taiwan's consumer price index (CPI) went up by 1.70% in December 2016 compared with the same month of previous year. The current inflation rate has turned rather tepid compared with previous months. The core inflation rate stood at a more tepid ratio as 0.81% in December, 2016. In addition, the wholesale price index (WPI) increased by 1.41% in December 2016 on the year-on-year basis. From a cumulative perspective, the CPI went up by 1.40% and WPI went down by 3.01% from January 1 till December 31 of 2016 on the year-on-year basis.
The unemployment rate in December 2016 stood at 3.79% representing a 0.08 percentage points decrease compared with the previous month. The current unemployment rate is considered at a more acceptable and reasonable level. Because unemployment rate is a lag indicator, which in a way has reflected that economic recovery since Q2 last year. The real earning on average from January till the end of November 2016 stood at NT$ 46,532 or 0.03% less compared with the averaged salary in the same period in 2015.
As for exchange rate, the NTD went somewhat weaker due to the relatively stronger USD in December 2016. The USD/NTD stood at 32.279 in late December 2016 indicating a mild but continuous depreciation, despite the NTD has gone strong in January 2017. As the US Federal Reserve conducted a rate hike on December 15 and is very likely to conduct a rate hike next year by turning its tone to incessant hawkish on January 18 of 2017, the greenback is estimated to go further stronger in the near future. Regarding the interest rate, it remained low and steady in December 2016 due to the continued loose monetary operations by the CBC.

Business Outlook

The portion of manufacturing firms who perceived business were better than expected in the target month was 36.7% or decreased by 9.6% compared with respondents who perceiving better business in the previous month. The portion of those perceived business were getting worse in the target month was 19.28% or increased by 1.4 percentage points than 17.8% perceiving worse business of the previous month. The portion of manufacturing firms who perceived business remained constant in the target month was 53.7% or increased by 8.2 percentage points compared with 45.5% perceiving constant business in the previous month. Overall, manufacturing firms perceived the business in the target month was rather neutral.
In addition, the portion of manufacturers who perceived business would be better in the next six months was 23.3% in the target month or increased by 1.4 percentage points than 21.9% feeling more optimistic about the future in the previous month. The portion of firms who perceived the economic outlook would be worsening was 18.8% or increased by 0.6 percentage points compared with 18.2% feeling rather pessimistic about the future in the previous month. The portion of manufacturing firms who perceived business remained constant in the next six months stood at 57.8% or decreased by 2.0 percentage points compared with 59.8% feeling neutral about the business outlook one month earlier. Overall, manufacturing firms perceived the business in the near future was somewhat optimistic.
The manufacturing Composite Indicator for December, 2016 adjusted for seasonal factors on moving average, saw a mild upward correction, and from a revision of as 99.85 points in November 2016 moved up to 101.40 points. Figure 1 shows an increase of 1.55 points, the third month of consecutive increase.
The TIER Service Sector Composite Indicator for December 2016 adjusted for seasonal factors on moving average also saw an upward correction and from a revision of 89.89 points in November 2016 went up to 90.31 points. Figure 1 shows an increase of 1.62 points, the first increase after a previous decline.
In addition, the TIER Construction Sector Composite Indicator for December 2016 adjusted for seasonal factors on moving average saw an upward correction as well, and from a revision of 85.71 points in November 2016 went up to 86.08 points. Figure 1 shows an increase of 0.37 points, the first increase after a previous decline, too.

Forecast on Individual Industries

Following are manufacturers' sentiments that are industry-specific in the monthly TIER surveys:

● Manufacturers' sentiments that have been in decline in the December survey and are expected to deteriorate over the next six months include:
Leather, Fur and Allied Product Manufacturing, Man-made Fibers Manufacturing, Electronic Parts and Components Manufacturing, Bicycles Manufacturing, Basic civil structure construction, Securities,
 
● Manufacturers' sentiments that have been in decline in the December survey, but are expected to improve over the next six months include:
Electrical Machinery, Supplies Manufacturing and Repairing, Data Storage Media Units Manufacturing and Reproducing,
 
● Manufacturers' sentiments that have been in decline in the December survey and are expected to remain sluggish over the next six months include:
Electrical Appliances and Housewares Manufacturing, Audio and Video Electronic Products Manufacturing, Motorcycles Manufacturing, Transportation and storage,
 
● Manufacturers surveyed who felt the December outlook was the same as the previous month, but the outlook is expected to exacerbate over the next six months include:
Industrial Chemicals, Plastics and rubber raw materials, Rubber Products Manufacturing, Plastic Products Manufacturing, Porcelain and Ceramic Products Manufacturing, Glass and Glass Products Manufacturing, Metal Structure and Architectural Components Manufacturing, Construction,
 
● Manufacturers surveyed who felt the December outlook was the same as the previous month, but the outlook is expected to improve over the next six months include:
Electric Wires and Cables Manufacturing, Communications Equipment and Apparatus Manufacturing, Motor Parts Manufacturing, Banks,
 
● Manufacturers surveyed who felt the December outlook was the same as the previous month and the trend is expected to continue for the next six months include:
Manufacturing, Food, Frozen Food Manufacturing, Soft Drink Manufacturing , Textiles Mills, Yarn Spinning Mills, Fabric Mills , Apparel, Clothing Accessories and Other Textile Product Manufacturing , Printing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal dies, Screw, Nut Manufacturing, Machinery and Equipment Manufacturing and Repairing, Cutlery and tools Manufacturing, Industrial Machinery, Electrical Machinery, Electronic Machinery, Transport Equipment Manufacturing and Repairing, Motorcycles Parts Manufacturing, Retail sales, Telecommunication services,
 
● Manufacturers' sentiments that have improved in the December survey and is expected to deteriorate over the next six months include:
Petrochemicals Manufacturing, Chemical Products Manufacturing, Petroleum and Coal Products Manufacturing, Motor Vehicles Manufacturing, Bicycles Parts Manufacturing,
 
● Manufacturers' sentiments that have improved in the December survey and is expected to remain upbeat over the next six months include:
Paper Manufacturing, Non-metallic Mineral Products Manufacturing, Cement and Cement Products Manufacturing, Precision Instruments Manufacturing,
 
● Manufacturers' sentiments that have improved in the December survey and the trend is expected to continue for the next six months include:
Slaughtering, Edible Oil Manufacturing, Flour Milling and Grain Husking , Prepared Animal Feeds Manufacturing, Wood and Bamboo Products Manufacturing, Education and Entertainment Articles Manufacturing, Real estate investment, Wholesale, Restaurants and hotels, Insurance.

TIER Forecast (issued on 25th January, 2017.)
(NT$100 million, Chained (2011) Dollars)

 

 

 
topˆ