Taiwan warned on threats of slowing exports to job market outlook

Taiwan – Slowing exports pose risk to job-market outlook Taiwan is scheduled to release labour-market data for August on 22 September. We expect the seasonally adjusted unemployment rate to have remained unchanged at 4.37%, near a three-year-low. The recent market turmoil and continuing signs of weak economic activity in key overseas markets are likely dampening local export producers’ confidence, delaying planned capital spending and hiring in the export manufacturing and trade sectors.

However, we expect this to be partly mitigated by the relatively buoyant employment outlook in the services sector, especially tourism and retail trade, amid rising tourist arrivals. Overseas arrivals rose nearly 5% to 3.3mn in the first seven months of 2011. Local officials remain optimistic that visitor arrivals will top 6.0mn by the end of 2011, following the recent agreement between mainland China and Taiwan to allow 500 mainland Chinese per day to visit Taiwan on non-group visas.

Thanks to rapidly rising arrivals from mainland China, the average hotel occupancy rate rebounded to more than 68% in 2010 from about 64% in 2008, even as the number of international hotels in Taiwan rose to 70 from 61 during the period, according to the Taiwan Tourism Bureau.