Taiwan's service sector maintains rapid growth

The sector reportedly maintained a 'yellow-red' status for the 9th consecutive month through Nov. 2017

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Ximen area in Taipei (Image from Flickr user Dago Pacheco)

TAIPEI (CNA) -- The local service sector continued flashing a "yellow-red" light in November 2017, with one metric gauging the outlook for the sector falling slightly but still pointing to overheating, according to the Commerce Development Research Institute (CDRI).

The CDRI, one of the country's leading economic think tanks, said the Index of Service Industry (ISI) for November stood at 104 points, a fall from 105 recorded in October, but still within the yellow-red range of 104-108.

The think tank said the November ISI marked the ninth consecutive month the service sector has flashed yellow-red at a time of solid global demand on a continuing economic recovery.

The CDRI uses a five-color system, in conjunction with the ISI, to describe the outlook for Taiwan's service sector, focusing on three major segments -- securities trading, business operations, labor market and wages.

Red indicates overheating, yellow-red signals slight overheating, green represents steady growth, yellow-blue sluggishness, and blue recession.

The CDRI said the latest yellow-red light reflected November exports which improved 14 percent from the previous year, lifting the revenue posted by the wholesale industry by 3.5 percent and retail sales by 3.4 percent in the month.

Of the three factors in the ISI, the CDRI said the sub-index for securities trading fell from 99 in October to 97 points in November as trading volume of service-related stocks plunged from NT$56.88 billion seen a month earlier to NT$19.19 billion (US$648 million).

As for labor market and wage factors, the sub-index remained unchanged at 107 points, although the number of employed, regular wages and average working hours all rose during the month, the CDRI said.

The CDRI said the sub-index for local business operations also remained the same in November at 104, with the increase in sales by retail and wholesale industries, power consumption and the amount of cargo handled by land transportation offsetting the weakness of other factors.

Looking ahead, the CDRI said, the ISI could rise to 105 in December, when the Christmas holiday buying spree boosts commercial activity in Taiwan.

The January ISI is expected to move up even further to 106 points with the Lunar New Year holiday approaching, which will pave the way for higher sales by retail businesses and the food and beverage industry.

The Lunar New Year holiday falls in mid-February this year.