Taipei--The local service sector showed a significant improvement in January, with an index gauging sentiment in the sector hitting a new high, according to a survey conducted by the Commerce Development Research Institute (CDRI).
The survey showed that the Index of Service Industry (ISI) for January stood at 105, up 2 points from a month earlier, indicating a "yellow-red" light which represents a range between 104 and 108. In December, the ISI flashed green, which ranges from 100 to 103.
The CDRI, one of the leading economic think tanks in Taiwan, said that a buying spree around the Lunar New Year holiday which kicked off on Jan. 27 and ran through Feb.1, boosted sales in the local retail business and food/beverage business that month.
The CDRI uses a five-color coded system, in conjunction with the ISI, to describe the outlook for Taiwan's service sector, focusing on three major segments -- securities trading, business operations, the labor market and wages.
Red indicates overheating, yellow-red slight overheating, green represents steady growth, yellow-blue sluggishness and blue indicates recession.
In January, the sub-index for securities trading rose from 98 in December to 100 as the price of service sector related stocks moved higher on the back of improving fundamentals, the CDRI said. However, the sub-index was depressed to some extent by a decline in turnover on the local equity market.
As for business operations, the sub-index rose from 99 in December to 100 in January, with many industries boosted by increased buying sparked by seasonal needs, the CDRI said.
The think tank said that business operations in the local market also improved due to rising demand for land cargo transportation.
The CDRI said the sub-index for the labor market rose from 100 in December to 102 points in January, reflecting an increase in wages and overtime hours, adding that hiring growth was also cited as a reason for the improvement.
Looking ahead, the ISI could flash green in February, when there were fewer securities trading sessions and work days, the CDRI said. That sentiment could continue into March as export-oriented industries as well as the local tourism sector are in a traditional slow season, the CDRI added.
Source: Focus Taiwan News Channel