Tue, Apr 24, 2007 - Page 12 News List

Unemployment rate close to six-year low, hirings are up

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Taiwan's jobless rate held close to a six-year low last month as service companies and agricultural businesses added workers.

The seasonally adjusted rate was unchanged at 3.94 percent last month from February, the statistics bureau said yesterday. The rate reached 3.8 percent in September and October, the lowest since February 2001.

Increased hiring may stoke consumer confidence and spending, helping the nation weather a slowdown in export demand as global growth cools. AU Optronics Corp (友達光電), the world's third-largest maker of liquid-crystal displays, is adding workers as it expands factories.

"A recovery in consumption is expected to help create more jobs," said Fang Wen-yen, an economist at KGI Securities Co (中信證券).

Fang expects the jobless rate to average 3.86 percent this year compared with 3.9 percent last year.

Consumers may increase their spending as the fallout from a bad credit card loan crisis last year eases. Lenders wrote off more than US$3 billion of bad credit card loans last year.

"Retailers and department stores are hiring more people as consumers are more willing to spend after surviving the bad card loan crisis," said Renee Chen, an economist at Citibank NA, Taipei.

The government forecasts household spending will climb 3.2 percent this year, double the pace of the previous year.

At the same time, export growth will slow to 6.2 percent this year from 12.9 percent last year, the government said in February.

Taiwan's economic expansion will cool to 4.2 percent this year from 4.6 percent last year amid slowing export demand, the IMF forecast this month. Still, the IMF expects the nation's unemployment rate to average 3.8 percent this year, which would be the lowest in seven years.

Among companies hiring, AU Optronics said last month it would finish construction of its second so-called "7.5-generation" plant by the end of the year. The Hsinchu-based company also planned to start running its first 7.5-generation factory at maximum capacity in the third quarter.

Liquid-crystal display makers' profits are recovering faster than expected as a supply glut clears, according to analysts at Lehman Brothers Holdings Inc and Macquarie Securities Ltd.

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