What is the business cycle signal?

How the signal light is built, what the five colours mean, when it is published and how to read it without over-interpreting.

Updated：2026-11-14

What it is

The business cycle signal is a monthly composite assessment published by Taiwan's National Development Council. Several economic series are each converted to a score and added up into a composite score from 9 to 45, which maps to one of five lights.

The five lights

| Light | Score | Official reading | |---|---|---| | Blue | 9–16 | Sluggish | | Yellow-blue | 17–22 | Transitional | | Green | 23–31 | Stable | | Yellow-red | 32–37 | Transitional | | Red | 38–45 | Booming |

This is the official description of the economy, not advice about stocks or any investment.

What goes into it

The main components include the M1B money supply, the stock price index, industrial production, overtime hours, customs exports, machinery and electrical equipment imports, manufacturing sales and wholesale, retail and restaurant sales. Each is converted to a score and then summed.

When it is published

Around the end of each month for the previous month, so the latest data month is usually one month behind. Earlier figures are also revised each month, so a given month can change slightly later.

Leading, coincident and lagging indexes

The council also publishes three indexes: the leading index tends to turn before the economy, the coincident index moves with it and the lagging index follows later. Plotting the three detrended series together shows the order of turning points.

How to read it without over-interpreting

• The light describes the whole economy, not the stock market; their turning points often differ.
• A single month is affected by seasonality and special events, so look at several months.
• The site's business cycle page shows the score history with the five light bands for comparing periods.

This article only explains terms and calculations; it is not investment advice.