ASIA NEWS NETWORK
WE KNOW ASIA BETTER
'Local service industry in Taiwan weak'
Publication Date : 05-08-2012
The performance of Taiwan's service industry remained relatively weak in June due to the major negative factors of devastating heavy rains, hikes in electricity costs, and commodity price increases, according to the Commerce Development Research Institute (CDRI).
The index of service industry (ISI), compiled by the institute to gauge the performance of the service sector, edged down to 95 points for June from 96 in May, prompting the researchers to issue a yellow-blue signal for the seventh-consecutive month.
This signal indicated that the business conditions of the service sector remained sluggish.
Of the three major components making up the ISI, the indicator for the actual business operations of the service industry moved up by one point to 96 from May mainly because of improvement in the retail sales and restaurant business in spite of global economic slowdown.
The indicator for the performances of the stock market remained unchanged at 95 points from May, reflecting the general weak development of the major international securities markets as most investors chose to stay on the sideline.
The indicator for manpower and salary in June also held steady with no change from 102 points recorded in the preceding month due to rising labor demand for the peak summer consumption season.
Looking ahead, CDRI researchers said the business conditions for Taiwan's service sector for July were mostly likely to continue the trend in preceding months in view of continuously weak demand from international markets, especially from the United States and European nations.
However, there were also positive developments on the domestic market, including the government's offering subsidies to consumers for purchasing energy-saving electrical appliances. There were also high hopes for anticipated increase in inbound tourists in the month of July.
There still can be chances for the redounding of the ISI indicators if the local consumers made massive purchases of new appliances in order to save electricity bills.
It will also help spur business activities in the service sector if the number of tourist arrivals set a new monthly record in July for summer travels, said the researchers.