TAIPEI (Taiwan News) — A leading economic think tank lowered the status of Taiwan’s manufacturing sector to a green light for October due to China’s energy problems and inflation fears, reports said Friday (Dec. 3).

The Taiwan Institute of Economic Research (TIER) said the manufacturing sector could no longer be represented by a yellow-red light, CNA reported. According to the country’s five-color system, yellow-red refers to a warming economy, while green stands for stable growth.

Looking toward the future, the COVID-19 Omicron variant could play an important role, TIER cautioned. While the new, likely more infectious strain of the coronavirus had not reached Taiwan yet, the authorities have tightened border controls ahead of the Lunar New Year holiday period.

For October, hopes of increased production ahead of the year-end holidays were offset by power restrictions in China forcing Taiwan manufacturers to suspend production. In addition, the United States Federal Reserve warned that inflationary pressures could last longer than initially expected, also dampening expectations for the manufacturing sector, according to the TIER.

While the sector’s green light for October was the second this year, on the whole, Taiwan's manufacturing sector is overall stable, the think tank said.