More than 3,100 factories closed in the six months to June as the economy continued to flounder, up 55.3 percent from a year ago, the economic ministry said yesterday.
"The prolonged economic slump has forced many Taiwanese manufacturers either out of business or to shift their facilities to the mainland for cheaper labor and land costs," a ministry official said.
The official said the real number of factories closing, mostly in the traditional manufacturing sector, was greater than the official statistics revealed because many firms had not registered their closings with the government.
Meanwhile, the number of newly registered plants in the January through June period fell 26.9 percent to 2,017 from a year earlier, the ministry said.
Some 5,000 factories were shut down last year. The closures forced more than 100,000 people out of work.
Local media reports have said the number of closures this year could top 6,000.
The unemployment rate may hit its highest level for nearly 16 years at 4.5 percent in June, according to a preliminary estimate conducted by the Directorate General of Budget, Accounting & Statistics.
The statistics agency says more people were laid off due to factory closures amid the continuing economic slowdown and those num-bers will be increased by the newly-graduated joining the labor market for the first time.
The agency is scheduled to release the June jobless report on Monday.
Many businesses have moved their manufacturing operations to China recently.
Statistics compiled by the Mainland Affairs Council show that in the first five months of this year, Taiwanese investments in China amounted to US$1.07 billion, a 33.18 percent year-on-year growth.
In 2000, Taiwanese businessmen poured US$2.6 billion into China.
Investments in China account for 40 percent of Taiwan's overall overseas investments.
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