The nation's unemployment rate rose in July for the tenth straight month, hitting a record high of 4.92 percent.
The bad news comes as recent graduates enter the job market and unemployment is expected to continue climbing to more than 5 percent this month, according to the nation's statistics agency, the Directorate General of Budget, Accounting and Statistics.
Last month a total of 485,000 people -- 15 years of age and over -- were out of work, representing an increase of 0.41 percent over the previous month and 1.86 percent from last July's 3.06 percent, according to the statistics agency.
In a breakdown of July unemployment, northern, central, southern and eastern Taiwan reported jobless rates of 5.10 percent, 4.79 percent, 4.96 percent and 5.15 percent, respectively.
"The higher unemployment in northern Taiwan reflected the economic slowdown spreading to high-tech and services industries from old economy sectors," said Chen Jin-cherng (
In addition to graduates entering the market, the jobless rate was also nudged up on increased factory closures and layoffs, according to data provided by the statistics agency.
Based on seasonal patterns, the jobless rate might exceed 5 percent this month, while for the full year, the jobless rate is expected to rise to over 4.3 percent, Chen said.
Analysts placed a good portion of the blame on a weak global economy, which has knocked down Taiwan's exports by 10 percent in the first six months year on year, according to the Ministry of Economic Affairs.
Lawrence Duke, head of research at Citibank in Taipei, said external factors were a major reason for the higher jobless figures and will play a crucial role in pushing the rate back down.
"You have to get economic growth back up and a lot of that at the moment is going to be guided by external demand rather than domestic demand," Duke said. "Until we see global economies start to come back, other measures are going to take longer and won't be as effective given the structure of the economy."
Irmak Surenkok, an economist at Primasia Securities Co, agreed that the jobless rate would continue to rise, topping 5 percent for this month.
"The cyclical downturn has brought to the surface some structural problems that had been building up in the economy," the analysts said.
In response to the shift of manufacturing lines to China, Taiwan's service sector continues to claim an increasingly large share of the national GDP and subsequently will cause a mismatch of skills in the economy, Surenkok said.
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