Executive Search in Taiwan– 2016 Outlook
2016 Opens with Uncertainty and Softening Economy
Confronted with a soft global economy and weakening Chinese economy (Taiwan’s largest trading and investment partner), Taiwan’s macroeconomic environment is expected to be soft at 2% to 2.6% as forecasted by The Economist and IMF respectively.
Economy policy uncertainties attributed to the January 2016 presidential elections along with absence from regional trade agreements pose added pressures in the mid-long term. The obvious impact is that of the South Korean–China Free Trade Agreement on Taiwanese products selling to China.
Inflation, meanwhile is expected to recover slightly, from -0.1% to 1% as forecasted by the IMF.
A demographic shift is becoming clear as the population aged 65 will surpass the young population (aged below 14). A low birthrate will affect the youth labor force supply. Opportunity exists in the affluent elderly segments as GDP Per Capita of Taiwan is expected to reach US$21,700 in 2016 as estimated by The Economist
IT sectors are expected to grow healthily. Further digitalization is expected to take place in 2016 driven by E-Commerce, Internet of Things (IoT), automation and smart factory. Steady recovery of US economy is expected to benefit Taiwanese OEM and exports, especially semi-conductor
Consumer products, consumer electronics and entertainment sectors are expected to be relatively stable. Meanwhile, packaged foods and foods services recovery will very much dependent on consumer sentiments after a series of food safety crises in 2015
The retail sector is expected to be soft. Tourism and hospitality meanwhile, is subject to policies, especially the quota set on Chinese tourists arrivals. Opening of Taiwan to Chinese tourists in 2009 had contributed significant to Taiwan’s overall tourist arrivals and, in 2014, overall tourist numbers reached 9.9 million with 3.6 million from China, accounting for the world’s fastest tourism growth.
China has allowed citizens from 19 provinces to enter Taiwan last year, but uncertainties remain in 2016 due to the tourist quota per day set by the Taiwan government
Oil and Gas, property and banking sectors meanwhile, are expected to be weakening. Some risk is also attached to energy supplies as Taiwan is phasing out nuclear power.