The local service sector remained sluggish in September due to a reduced number of business days caused by Typhoon Megi, according to a survey by the Commerce Development Research Institute (CDRI).
Citing the survey, the CDRI said the index of service industry (ISI) was 97 points in September, down two points from the previous month and still flashing a "yellow-blue" light, which represents a range 93 to 99 points.
The CDRI had forecast an ISI of 100 points in September, which would have flashed a "green light."
The CDRI uses a five-color coded system in conjunction with the ISI to describe the climate of Taiwan's service sector, focusing on three major segments -- securities trading, business operations, and the labor market and wages.
Red signals overheating, yellow-red indicates slight overheating, green represents steady growth, yellow-blue signals sluggishness and blue indicates recession.
The CDRI said closures due Typhoon Megi affected local business operations in September, with that sub-index falling two points from a month earlier to 94 points.
There was improvement in three areas -- revenue generated in the leasing industry, the volume of cargo delivered by land transportation and the number of flights handled by local airports � but it was not enough to offset factors such as a sales decline in the retail/wholesale and technology service industries and a drop in power consumption, the CDRI said.
Meanwhile, the sub-index for securities trading remained unchanged at 99 points in September, the survey showed. The CDRI said that although the price of service sector-related stocks dropped in September, their trading value and volume increased.
The sub-index for the labor market also remained steady at 99 points, the CDRI said. Average wages in the service sector rose in September but the average number of working hours fell, the think tank said.
It forecast that the ISI for October would rise to 99 points on higher consumption spurred by an increased number of holidays and anniversary promotional campaigns by department store chains.
But even at 99 points, the ISI will flash a yellow-blue light in October, the CDRI said.
In November, the ISI may drop to 98 points, the CDRI said, citing lower share prices and higher land taxes, which it said would discourage consumer spending.
Source: Focus Taiwan News Channel