Jobless rate at 3.5% in January

The unemployment rate rose to a record in January as company closures and falling overseas demand for the electronics left more people without work.

The jobless rate rose to 3.5 percent from December's 3.4 percent, seasonally adjusted, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said. That was the highest since the government began compiling the figures in 1978. Without adjusting for seasonal changes, unemployment rose to 3.4 percent from 3.3 percent.

Demand for labor in Taiwan is set to slip further as exports weaken and more companies move factories to China, where costs are lower. The government said yesterday export growth will probably slow to 5 percent from last year's 22 percent, and last week cut its 2001 economic growth forecast to 5.3 percent from 6 percent.

"As exports go down, businesses lose money and even shut down, so they lay off people or won't be hiring new people," said Irmak Surenkok, an economist at Primasia Securities Ltd. "Some businesses have closed, and others are moving to China because of the more competitive environment there." Taiwan's benchmark TWSE stock index fell 0.5 percent to 5,732.28, reflecting investors' concern about the slowing economy.

The number of people out of work last month rose to 329,000 from 323,000 in December. Of that number, 117,000 lost their jobs because of factory closures or layoffs, the government said -- the highest number on record.

Acer Inc (宏電), Taiwan's biggest computer maker, fired 500 factory workers last week, citing a drop in overseas orders. The closure this week of Tomorrow Times (明日報), an Internet newspaper, cut another 300 jobs.

"The situation in February is not very good," said Chen Chin- Cheng (陳金城), deputy director of the statistics agency's census department. "Unemployment will probably rise." A sharper-than-expected economic slowdown in the US is dragging on Taiwan's companies. Industrial production fell 14 percent in January from a year earlier, and exports fell 17 percent.