Domestic trade — including retail, wholesale and the restaurant sector — continued to fall last month, dropping 16.34 percent year-on-year to NT$897.8 billion (US$26.8 billion), the Ministry of Economic Affairs said yesterday.
Citing the global economic slowdown and weak domestic consumption, the ministry said all three sectors shrank last month year-on-year.
The wholesale sector saw the biggest year-on-year drop in sales at 19.23 percent, followed by the retail sector at 9.81 percent and the restaurant sector at 8.07 percent, the ministry said.
“This was anticipated as neither retail sales nor wholesale sales have been able to withstand the slowdown of the domestic and international economy,” Tine Olsen, a Sydney-based economist at Moody’s Economy.com, wrote in a note released yesterday.
“Domestic trade is not expected to rebound until external demand picks up again. This is likely not going to be until late this year, hence consumers and businesses on the island have some tough months ahead,” Olsen said.
For the whole of last year, domestic trade edged up 2.16 percent to NT$12.179 trillion from the previous year.
Companies in the wholesale sector saw a gain of 3.6 percent in revenues last year, although trade began contracting in October, coinciding with steep declines in the nation’s exports.
By contrast, businesses in the retail sector saw a decrease of 1.47 percent in their revenues last year. Retail sales had been sluggish for most of the year and saw a clear contraction emerge in June.
“Retail sales are weak as consumers have a dismal outlook of the economy, indicated by consumer confidence hitting a record low during the fourth quarter of 2008. Unemployment has been climbing in recent months adding to the anxieties of consumers,” Olsen wrote in the note.
Additional reporting by Kevin Chen