Taipei-The local service sector continued to flash another red-yellow light for the month of July, pointing to slight overheating, the Commerce Development Research Institute (CDRI) said Tuesday.
The CDRI, one of Taiwan's leading economic think tanks, said that the Index of Service Industry (ISI) for July stood at 104, and continued to flash red-yellow for the month.
It was the fifth consecutive month in which the ISI has flashed red-yellow after a green light in February, according to the CDRI.
The CDRI uses a five-color code system, in conjunction with the ISI, to describe the outlook for Taiwan's service sector, focusing on three major segments -- securities trading, business operations, and labor market and wages.
Red indicates overheating, red-yellow slight overheating, green represents steady growth, blue-yellow sluggishness, and blue indicates recession.
On the back of a steady global economic recovery, Taiwan's exports in July grew 12.5 percent from a year earlier to US$27.11 billion, the institute said.
Also compared to the same month of last year, the July production index for the manufacturing sector rose 2.9 percent to 113.4, while the sector's purchasing managers index (PMI) stood at 59, pointing to expansion, according to the CDRI.
Furthermore, sales generated by the local wholesale sector in July also increased by 4.2 percent from a year earlier due to strong exports, reaching NT$838.40 billion (US$27.94 billion), while retail sales dropped 1.7 percent year-on-year to NT$338.80 billion, the CDRI added.
The think tank said the ISI indexes for August and September are likely to remain between 104 and 105, and that the service sector is still expected to flash red-yellow, as demand for semiconductors used in mobile devices will help drive the retail market due to the release of several new handsets in recent months, including Apple's new iPhone, which is expected to be unveiled later this year.
Source: Focus Taiwan News Channel