Nearly 4,200 Taiwanese factories were shut down in the 10 months to October from slowing domestic and overseas demand in the wake of the terror attacks on the US, the Ministry of Economic Affairs said yesterday.
"More businesses are likely to close their plants here if the economic condition worsens," said a ministry official, who estimated the number would top 6,000 by the end of this year, up from 5,000 last year.
The number of factory closures in the January-to-October period rose 6.8 percent year-on-year to 4,166, but the official feared the actual number was greater because many firms had not registered with the ministry.
Meanwhile, the number of newly registered plants in the 10-month period dropped 34.3 percent to 3,112 as more businesses scaled down investment in face of weaker demand, according to the ministry.
The situation was expected to worsen since domestic investment by local manufacturers was anticipated to shrink by a record 35.1 percent to NT$246.6 billion (US$7.15 billion) next year, according to a survey by the Directorate General of Budget, Accounting and Statistics (DGBAS).
Taiwan has slipped into a technical recession as its GDP shrunk 4.21 percent in the three months to September, the biggest quarterly fall in 26 years, said the DGBAS.
GDP is now expected to shrink another 2.68 percent for the fourth quarter and contract 2.12 percent for the full year, it added.
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