The unemployment rate rose to a second straight record in Febru-ary as falling overseas and domestic sales forced manufacturers to shed workers, and companies moved production to China to cut costs.
Unemployment rose to 3.7 percent from January's 3.5 percent, seasonally adjusted, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said. That's the highest since the government began compiling figures in 1978. The unadjusted jobless rate rose to 3.7 percent from 3.4 percent.
The job market may shrink further as electronics exports falter, more companies move factories to China and consumers cut spending at home. Electronics makers aren't the only companies being forced to cut workers -- those that rely on domestic demand for staples as basic as sugar are also being hurt.
The number of people out of work last month jumped 10.6 percent from January to 364,000. Of that number, 143,000 lost their jobs because of factory closures or layoffs, up 22.2 percent from the previous month, the government said. It blamed the slowing global economy and the "continuing restructuring of domestic industry" for the increase.
Exports -- the biggest contributor to Taiwan's economic growth -- fell 4.4 percent in the first two months of the year from a year ago, pulled down by slumping sales of computer chips and other electronics to US customers.
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* The 3.5 percent jobless rate was already at a record level in January.
* Unemployment continued to rise last month, reaching a record 3.7 percent.
* The number of people out of work last month jumped 10.6 percent from January to 364,000.
Record unemployment and falling industrial production may prompt Taiwan's central bank to cut interest rates further when it holds its next quarterly meeting on March 29, economists said. The bank has already cut the key rate half a percentage point since December.
``Given the record high unemployment rate and tame inflation, the central bank will have more room to reduce interest rates to boost domestic demand,'' said Irmak Surnekok, an economist at Primasia Securities Ltd. She expects the bank to cut rates another half a point in the first half of 2001.
The government expects economic growth to slow to 5.3 percent this year from last year's 6 percent, with export growth shrinking to 5 percent from 22 percent. Many economists say that forecast is too optimistic.
Still, unemployment is set to stabilize in April as the government pours money into public-works projects to generate jobs, said Chen Jin-Cherng (
The government said in January it plans to spend an extra NT$111.5 billion (US$3.4 billion) in this year's budget on roads, bridges and other projects aimed at creating jobs and boosting the domestic economy as exports decline.
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