Mon, Sep 23, 2019 - Page 16 News List

Consumer spending rises steadily in Q3

WORKER NUMBERS:A researcher said exports might continue to fall slightly and affect the labor market, leading to less employment growth and more unpaid leave

By Chen Cheng-hui  /  Staff reporter

Consumer spending in Taiwan grew steadily in the third quarter as households bought a range of goods amid promotional activities by retailers and vehicle sellers, which could offset the negative effect of a rise in the number of workers on unpaid leave, Taishin Securities Investment Advisory Co (台新投顧) said in a report on Friday.

Moreover, strong consumption momentum is likely to continue in the fourth quarter thanks to seasonal factors and new smartphone launches, as well as government policies to stimulate domestic demand, Taishin said.

Despite slowing external demand due to the US-China trade dispute, Taiwanese are not cutting consumption for now, the report said.

Trade tensions between Washington and Beijing have hurt the global economy and undercut Taiwan’s export growth, which has raised concerns that the economy might be derailed by declining external demand. The number of people on unpaid leave and affected by businesses downsizing or closing has been on the rise.

From Sept. 1 to Sept. 15, the number of people on unpaid leave was 1,950, a new high for the period since the Ministry of Labor in 2011 began tracking furloughed workers. Companies that impose unpaid leave are mostly in the metal, machinery and electrical sectors.

The unemployment due to corporate downsizing and business closures rose to 107,000 in July, the highest in 17 months, indicating that trade issues had affected the local labor market, the Directorate-General of Budget, Accounting and Statistics reported on Aug. 22.

“Overall customs-cleared exports might continue to fall slightly and affect the labor market, leading to decelerating employment growth and rising unpaid leave numbers,” Taishin macroeconomics researcher Jaime Chen (陳建名) said in its report. “However, owing to minimum-wage increases and the government’s incentive-based measures to boost domestic demand, Taiwanese consumers continue to display great vitality, which would remain strong in the fourth quarter, when the high season for consumption approaches.”

In the first seven months of this year, Taiwan’s retail sales rose 2.4 percent from a year earlier to NT$2.197 trillion (US$70.92 billion), while the food and beverage sector saw sales increase 4.9 percent to NT$474.5 billion in the same period, the Ministry of Economic Affairs reported on Aug. 23.

Taishin forecast that the retail sector would post more than 2 percent annual growth in sales in the fourth quarter, while the food and beverage sector is expected to show a stable increase, thanks to more campaign dinner parties ahead of the presidential election in January next year, and the implementation of fall and winter domestic travel subsidy programs, it said.

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