Services sector index announces the 12th ‘green light’ in a row
Taiwan’s service sector remained stable in February with the index flashing a “green light” for the 12th consecutive month, according to the Commerce Development Research Institute (CDRI, ).
It said domestic consumption was boosted in February by strong buying before and during the Feb. 18-23 Lunar New Year holiday, Valentine’s Day, and the Feb. 28 holiday that marked the 228 Incident.
In a report dated April 7, the CDRI said its index of service industry (ISI) stood at 103 points, up from a revised 100 in January.
The ISI, which assesses conditions in the service sector, flashes a green light when the index is between 100 and 103.
The CDRI uses a five-color system, in conjunction with the ISI, to describe the climate of the local service sector, focusing on three major segments — securities trading, the labor market and wages, and business operations.
Red signals overheating, yellowred indicates slight overheating, green represents steady growth, yellow-blue signals sluggishness and blue indicates recession.
In February, the sub-index for securities trading fell one point from a month earlier to 100 as investors had turned cautious ahead of the Lunar New Year holiday, when the local market usually closes, according to the data.
Investors preferred to cut their holdings and raise their cash positions before the holiday, while watching the market climate in the world during the holiday and preparing for new investment strate- gies after trading resumed, said the CDRI, one of Taiwan’s leading think tanks.
As for the labor market, the subindex rose 2 points from a month earlier to 103 as labor demand in the services sector rose during the Lunar New Year shopping season, the think tank said.
Business in Taiwan was boosted by strong consumption in February, with the sub-index rising 1 point from the previous month to 101, the CDRI said.
In its outlook for the March data, the CDRI said the ISI is expected to fall slightly from February, reflecting weaker buying interest, particularly in durable goods, after the February holiday shopping season.
Nonetheless, the index is likely to continue flashing a green light for March, the CDRI said.