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Taiwan's service sector flashes 6th consecutive 'yellow-blue' light

Taiwan's service sector flashes 6th consecutive 'yellow-blue' light

Taipei, Oct. 10 (CNA) At a time of a slowing economy at home and abroad, earnings in Taiwan's service sector remained weak, as an index gauging the sector flashed a yellow-blue light for the sixth consecutive month in August, indicating sluggishness, according to the Commerce Development Research Institute (CDRI, ???????). In a monthly report, the CDRI, one of Taiwan's leading think tanks, said that the index of service industry (ISI) stood at 96 points, unchanged from a month earlier, making the local service sector stuck in the yellow-blue light coverage. The domestic service sector felt the pinch of the impact resulting from weakening economic fundamentals, with Taiwan struggling to maintain its gross domestic product growth at 1 percent for 2015 due to a worse-than-expected export performance amid falling global demand. The CDRI uses a five-color system in conjunction with the ISI to describe the climate of the local service sector, focusing on three major segments -- securities trading, the labor market and wages, and business operations. Red signals overheating, yellow-red indicates slight overheating, green represents steady growth, yellow-blue signals sluggishness and blue indicates recession. The sub-index for securities trading fell 1 point to 96 in August after the local equity market trended lower in the month due to lingering worries over the global economic climate, the CDRI said. Such economic worries had prevented equity investors from buying but prompted them to cut their holdings to drag down the sub-index, the think tank said. In August, the weighted index on the Taiwan Stock Exchange fell 5.66 percent from a month earlier. The sub-index for business operations also fell one point from a month earlier to 95 in August, the CDRI said. The think tank said that with international crude oil prices staying low and the government's move to sharply slash its 2015 GDP growth forecast to 1.56 percent from 3.28 percent, consumer confidence was hurt with many of them becoming less upbeat about the local business operations. However, the sub-index for the labor market bucked the downtrend, rising one point from a month earlier to 100 in August as a traditional peak season for the fourth quarter was approaching, prompting employees to raise their workforce, and working hours for employees, including overtime hours, the CDRI said. Looking ahead, the CDRI said that as department stores have been launching promotional campaigns for their anniversaries to take advantage of the peak season effects, consumers' buying has showed signs of picking up. The think tank said that the ISI for September and October could rise to 99 and 100 points, respectively. (By Huang Chiao-wen and Frances Huang)


Updated : 2021-09-17 02:51 GMT+08:00