The service sector could have stayed in the doldrums last month, the Commerce Development Research Institute (CDRI, 商業發展研究院) said on Thursday as it released its report for March.
Last month’s score for the index of service industry (ISI) might fall to 95 points from 98 points in March, continuing to flash “yellow-blue,” indicating sluggishness, it said.
The ISI report for last month is scheduled to be released early next month.
The non-profit institute uses a five-color system, coupled with the ISI, to describe the climate of the local service sector, focusing on three segments — securities trading, the labor market and wages, and business operations. “Red” indicates overheating, “yellow-red” a slight overheating, “green” means steady growth, “yellow-blue” sluggishness and “blue” recession.
If the ISI for last month remained in the 93-99-point range, it would indicate a yellow-blue signal for the sixth consecutive month, the institute said.
The institute said that Apple Inc’s sales drop in the first quarter affected shipments by its Taiwanese suppliers, which had an indirect adverse effect on the service sector, noting that the US company’s local suppliers account for at least 30 percent of total sales in the local manufacturing sector and 20 percent of the total capitalization in the local equity market.
Other negative factors include a decline in the number of Chinese tourists, which would affect sales in Taiwan’s retail, dining and logistics sectors, as well as a weak market sentiment toward the local stock market ahead of the May 20 inauguration of president-elect Tsai Ing-wen (蔡英文), the institute said.
The index is likely to pick up this month and next, with the approach of the wholesale peak season and the launch of new handheld devices, which is expected boost consumption, the institute said.
To inject momentum into the local service sector, the government should expand an old-vehicle scrapping program to boost sales of new vehicles, continue promoting related trade policies, and upgrade the retail industry’s links to online purchases, the institute said.
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