According to Commerce Development Research Institute’s” Business Cycle Composite Index for Taiwan Service Sector”, the booming of business in commerce service industry in Taiwan will start to decline, a warning sign for the recession by the end of the year is emerging. It is worth to be observed whether it will start to recess at the end of the year and countermeasures should be prepared as early as possible.

 Coincident Index

 
　CDRI Business Cycle Prediction Team explained, the “Leading Composite Index” which compiled base on the Business Composite Index by NBER of United States, can be a indicator of overall comer service business situation, the “Coincident Composite Index” has been in the lead of the” Leading Composite Index” for seven months, will start to decline on October, and the degree of single month declination (0.04) will be bigger than the prediction in past five months which was at the average of (0.038). Although the cycle index is still exceeding the long-term tendency 100, which is 100.13, but the declination might be the weakness of recovery. We need to inspect the effects of our banking, finance, trade or labor policies, and take precautions before it is too late.

Three in Six Minor Index Shows Recession in the Leading Index

  In the data of the first season this year by Directorate-General of Budget, Accounting and Statistics, Executive Yuan, there are three changes shows harmful in the business cycle indicator system, including “Civil Substance Capital Formation” cycle index is declining from January to March, “Unemployment benefits first authorization acceptance number (reciprocal)” declined in February and March,” Commerce Service Industry Employment net entry rate” reduced in February and March. The stagnation of investment and employment lead to the declination sign of the Leading Indicators in October.

 Business Cycle Composite Index for Taiwan Service Sector

 Source：CDRI Business Cycle Forcasting Team