Battered by the economic downturn, more than 9,000 local businesses were forced to close last year, the highest level since the dot-com bubble burst in 2001, the latest data by the Ministry of Finance showed.
The country had a total of 1.18 million businesses at the end of last year, a drop of 9,047 from the previous year, as many businesses failed to weather the economic downturn, the Chinese-language Commercial Times reported yesterday, citing statistics provided by the ministry’s National Tax Administration.
In the last four months of last year, total industrial revenue plunged NT$1.7 trillion (US$ 50.93 billion), with the manufacturing industry seeing the largest decline with NT$1 trillion, the report said.
Last year, total industrial revenue fell 2 percent, or NT$656.7 billion, from a year earlier to NT$35.41 trillion, marking the first contraction since 2001, it said.
Total business sales shrank 11 percent in 2001, the largest contraction in the nation’s history.
This showed that local businesses were still doing well in the first half of last year until the global financial crisis intensified in September.
Statistics showed that total business sales were NT$11.06 trillion in the last four months of last year, a decrease of 13 percent, or NT$1.72 trillion, from the same period a year earlier, the report said, adding that the contraction was sharper than in 2001.
The manufacturing industry saw sales fall by NT$1 trillion mainly because of a rapid contraction in exports. The wholesale and retail industries, also hit by the downturn, saw sales drop NT$499.8 billion within the last four months of last year.
Aside from a contraction in exports, cautious spending by domestic customers was also one of the reasons behind the increase in closures, the report said.
The finance and insurance industries reported a drop of NT$80.6 billion in revenue in the last four months of last year, as the spread between deposit rates and loan rates narrowed after a series of interest rate cuts by the central bank.
Moreover, processing fee revenue also dropped sharply as wealth management businesses were affected by a bearish outlook for the global financial sector.
From September to December, only the hospitality and food industries defied the trend and reported a year-on-year increase of NT$5.8 billion in sales, it said.