Taiwan Economic Outlook – December 2019

Record Retail Consumption in Q3

Taiwanese consumers increased their retail purchases last month, defying a sluggish economy and unfavorable trade conditions. Retail sales for October rose 4.2% year-on-year to NT$340.7 billion (US$11.2 billion), a record-breaking figure for that month, apparently encouraged by the recent boom in Taiwan and U.S. stock markets, department store anniversary sales, an extended weekend holiday, and higher wages. It was the eighth consecutive monthly increase in retail sales. The automobile and motorcycle sector experienced the highest sales growth, rising 17.4% from a year earlier.

The wholesale trade in October decreased by 1.3% year-on-year to NT$896.2 billion, the Ministry of Economic Affairs (MOEA) reported, while sales of food and beverage services increased 4.3% from October last year.

Taiwan’s jobless rate declined a miniscule .03 percentage points in October to 3.77%, according to the Directorate General of Budgeting, Accounting and Statistics (DGBAS), which described the drop as indicating that the job market remains stable. DGBAS also noted that the number of workers facing a job loss due to business closures or downsizing fell by 3,000 the same month, a sign of Taiwan’s economic resilience amid global uncertainty over U.S.-China trade tensions.

The MOEA on November 20 reported that export orders, a leading economic indicator, fell yet again in October, completing a full year of continuous decline. Export orders dropped 3.5% year-on-year, affecting almost all of Taiwan’s major industries. This downward trend is not likely to correct by year’s end, which will mean a decrease in export orders for the whole of 2019.