The government’s business climate monitor was “green” for the eighth consecutive month last month, reflecting a stable improvement in the economy, although the pace slowed from the previous period, the National Development Council said yesterday. The council’s monitoring system registered 28, a point lower than January, mainly due to slowing manufacturing activity, National Development Council Director Wu Ming-huei (吳明蕙) said. “Many manufacturers moved their production schedule ahead to January to avoid disruptions over the Lunar New Year holiday, rendering sales slightly softer in February,” Wu told a media briefing.

Manufacturing activity could pick up this month following the holiday disruption, even though downside risks continue to weigh, she said, citing further interest rate increases by the US Federal Reserve and the start of Britain’s exit from the EU. The nation’s exports could continue to benefit from a recovering global economy, with leading economic indicators in the US and Japan registering positive movements last month, while they are holding steady in Europe, Wu said.

The council uses a five-color system to indicate the nation’s economic state, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors suggest shifting gears. The council’s leading series of indicators declined 0.1 percentage points to 101.88, while the coincident index weakened 0.11 percentage points to 103.35, the report said. The former gauge aims to capture the nation’s economic state up to six months ahead and the latter index reflects the current condition. The latest data suggests the pace of recovery slowed slightly rather than changing direction, Wu said.

Building permits and the TAIEX average closing price had positive cyclical movements last month compared with the previous month, the report said. Domestic developers and builders have regained some confidence and are launching new projects this year after the government implemented measures to encourage urban renewal projects and agreed to consider lowering property taxes. The local bourse rallied close to the 10,000-point mark on the back of foreign fund inflows that also pushed up the New Taiwan dollar 6 percent against the greenback. The New Taiwan dollar yesterday gained 0.79 percent, or NT$0.238, to close at NT$30.25 against the US dollar in Taipei trading, a two-and-a-half-year high, central bank data showed.

The advance was slower than the South Korean won’s 0.88 percent rise and the Japanese yen’s 1.05 percent rise, the central bank said in a statement. Many have raised concerns that local exporters could incur foreign-exchange losses because of the steep appreciation of the New Taiwan dollar. The central bank said the market would decide the local currency’s value and it would only intervene in response to speculation or abnormal movements.