Taipei: Taiwan’s economy remained warm in February as strong demand for artificial intelligence (AI) chips bolstered its manufacturing sector, the National Development Council (NDC) said on Thursday.
According to Focus Taiwan, the NDC’s monthly data revealed that the index gauging the state of the country’s economy flashed a yellow-red light in February, indicating warming sentiment. This marked the second consecutive month of such a signal, with the composite index rising by two points to 37, the highest figure within that range.
Chiu Chiu-ying, head of the NDC’s Department of Economic Development, expressed caution when questioned about the possibility of the index flashing red in March. She emphasized the significance of leading indicators in forecasting economic trends, noting that the leading index increased by 0.64 percent to 103.35, marking four consecutive months of growth.
The NDC employs a five-color system to assess the country’s economic performance. Blue indicates contraction, yellow-blue suggests sluggishness, green signifies stable growth, yellow-red reflects a moderately hot economy, and red points to an overheated economy.
Among the nine sub-indexes, only two exhibited bullish changes. The sub-indexes measuring sales in the manufacturing sector and revenue generated by retailers, wholesalers, and food and beverage businesses both flashed red, rising from a green and yellow-blue light, respectively.
In addition to manufacturers’ factory expansion, which led to an increased total floor area of new building construction projects, Chiu noted that strong demand for AI chips also boosted imports of semiconductor equipment.
The only decline was observed in overtime hours in the industrial and service sectors, which fell from a yellow-red light to green. Meanwhile, the other six sub-indexes in the February composite index-merchandise exports, money supply, changes in stock prices, imports of machinery and electrical equipment, business sentiment among manufacturers, and industrial production-remained unchanged.