Global| Jun 22 2005Taiwan Employment Grows, but Factory Sector Lags; Similar Pattern for Other Asian NICs
Summary
After a strong rebound in 2004, the growth in the Taiwanese economy shows signs of moderation. Year-to-year growth in GDP was 2.5% in Q1, the slowest in seven quarters. Today, the Directorate-General of Budgeting, Accounting and [...]
After a strong rebound in 2004, the growth in the Taiwanese economy shows signs of moderation. Year-to-year growth in GDP was 2.5% in Q1, the slowest in seven quarters. Today, the Directorate-General of Budgeting, Accounting and Statistics reported employment growth of a respectable 19,000 in May (not seasonally adjusted) following 22,000 in April. But manufacturing jobs declined in those two months and also in March and February, the longest string of reductions since late 2001. This is shallow compared to the outright recession in 2001, but it is a clear break in the previous uptrend. The unemployment rate ticked higher in May to 4.1% from a cyclical low of 4.0% in April; while this is still below the 4.4% of both the year-ago and 2004 average, in the last several months, the rate looks to have stopped falling.
Growth in Taiwan presently is concentrated in service industries. Jobs are increasing the most in what might be termed "support" functions for the economy: travel, finance, real estate and health care.
Taiwan's labor market thus seems to be hesitating, and the behavior of employment in its neighboring nations has been mixed. In Hong Kong, for instance, total employment is up markedly, but as in Taiwan, the growth is in services, as manufacturing continues a longer-run downtrend. In South Korea, employment has strengthened a bit in the last few months, but factory jobs are flat. So Taiwan's recent ambivalent performance is not unique. We'd surmise that rising energy costs and the gains in the vast Chinese economy are pressuring these smaller Asian economies.
| TaiwanNSA, Thousands | May 2005 | Apr 2005 | May 2004 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Employment | 9,918 | 9,899 | 9,764 | 9,786 | 9,573 | 9,454 |
| Manufacturing | 2,713 | 2,717 | 2,664 | 2,672 | 2,590 | 2,564 |
| Private Services* | 5,439 | 5,417 | 5,309 | 5,325 | 5,174 | 5,084 |
| Unemployment Rate (%) | 4.1 | 4.0 | 4.4 | 4.4 | 5.0 | 5.2 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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