Does the economy recover? 經濟好轉了嗎?

For USA and Taiwan, I ponder and prefer answering “NO”.

Although there are some “good” news and the stock markets soar for a couple of days, I am still not “positive” for the economy of these two countries.

For Taiwan, the government said that the drops of export and import in Jan. and Feb. are not “more” terrible than Dec. 2008. Compare to the same period one year before,  goods exports in Jan. and Feb. dropped 37.2%, and imports declined 45.6%; in Dec. 2008, the exports declined 41.9% and imports declined 44.6%. The government said that the decline of imports is due to the price dropping of crude oil, from $90/barrel to $42.5/barrel. All the data uses USD as the statistical currency.

The mass media and some other organizations think it is a good news because the decline of exports is better than the prediction. However, let’s check the chart below, which is a historical import and export data of Taiwan.

Taiwan_Import_Export_Historical_Data (by Phanix)

We can find the export (blue line) is just back to the level of 2003. And do not forget there are some “urgent orders” for electronic industries. Without these orders, the export decline must be sharper.

However, these “urgent orders” are “short term” stimuli, and I do not think the effect can last more than 6 months. Taiwan economy relies on export very much, and the major buyers are USA and China. So, unless USA and China get rid of the decline (or “almost” get rid of), I think the economy of Taiwan still has a long way to go.

For USA, some people think the best indexes of USA economy are car and housing. Let’s take a look of the two follows charts.

The light weight car sales and privately owned housing starts are back to the level of 1980’s. The financial systems and motor industries are still weak, GM is almost “bankrupt” after their buyout of many workers, and Bank of America, Citi Group and AIG still need bailouts. The only good news is the new housing starts has a rebound in Feb., but mostly of the new housing starts are multiple units buildings (e.g. apartment), not the single unit housing.

Besides, if you read detail of the government housing report (pdf link), you will find the median months for saling a new house keeps climbing up, from 7.1 months in Feb. 2008 to 9.8 months in Feb. 2009.

The housing sale prices also plunge sharply, and still decline (for the past 2 years).


Besides, the unemployment rate of March 2009 is the new record in a quarter-century, from 8.1% in Feb. to 8.5%. (news from NYTimes)

Someone may say the economy just reach the bottom of a canyon, however, I doubt it.

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