Taiwan’s domestic trade — including the retail, wholesale and restaurant sectors — dropped 9.52 percent year-on-year to NT$992 billion (US$30.8 billion) last month as a slowing economy continued to cut consumer spending, the latest economic data showed.
But compared with March, last month’s figure represented an increase of 1.73 percent, the Ministry of Economic Affairs said yesterday.
The ministry’s data showed the wholesale sector, the largest component of domestic trade, had experienced the steepest year-on-year decline at 12.19 percent to NT$705.88 billion.
It was followed by a decline of 2.57 percent in the retail sector to NT$259.97 billion, while there was a 1.62 percent rise in restaurant sector revenue at NT$26.2 billion for the month.
“Taiwanese producers are strained by a slowing global economy and a domestic economy in a deep recession,” Tine Olsen, a Sydney-based economist at Moody’s Economy.com, said of the continued contraction in Taiwan’s wholesale trade.
In March, wholesale trade shrank 15.2 percent to NT$693.57 billion, the ministry’s report showed.
Olsen said the retail sector still faced challenges from weaker consumer purchasing as many workers are uncertain of their future income, although a narrower decline last month in this sector than the previous month’s 3 percent decline could be a good sign, he said.
“The smaller drop in retail sales in April compared to previous months could indicate that the improving labor market and recent gains in share prices are making shoppers return to the malls,” she wrote in the statement.
Unemployment data released yesterday by the Directorate-General of Budget, Accounting and Statistics showed that unemployment edged down slightly to 5.76 percent last month from the previous month’s 5.81 percent, hinting that the local labor market was stabilizing amid positive news that some companies are re-hiring former employees.
But it is too early to expect consumers to completely resume purchasing and retailers will likely be subdued until the labor market improves, Olsen said, adding that the government’s shopping vouchers program exercised earlier this year may only have provided temporary relief for the sector.
From January through last month, the accumulated domestic trade saw a decline of 12.41 percent compared with the same period last year at NT$3.82 trillion, with the wholesale sector suffering the sharpest annual drop of 15.84 percent to NT$2.65 trillion, ministry data showed.
Other than the medicine and cosmetics category, which increased 6.74 percent, other wholesale categories all showed negative growth.
During the first four months, the retail sector saw revenues fall 3.73 percent to NT$1.06 trillion, while the restarurant sector reported that sales dipped 1.4 percent to NT$111 billion, the ministry said.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TALENT FACTOR: The nation’s chip sector would be difficult to replace, but to maintain that advantage, Taiwan must retain skilled workers, an academic said A group of experts on Sunday called on Taiwan to strive to maintain its world-leading position in the semiconductor industry, with a US-China chip dispute expected to continue regardless of who becomes the next US president. Tamkang University Graduate Institute of International Affairs and Strategic Studies director Li Da-jung (李大中) said at a Taipei seminar on global semiconductor security that the relationship between the two superpowers would remain confrontational. There appears to be “no turning back” in US-China relations, as US presidential candidates US Vice President Kamala Harris and former US president Donald Trump are both expected to continue Washington’s hawkish stance
RSS