Executive Search in Taiwan – 2017 Outlook
Exports Recover but Tourists Stay Home
President Tsai faces her second year of office in 201. As Taiwan’s economy has been deteriorating over the last two years, her top priority is to revive the sluggish environment and create jobs, along with managing relations with both China and the new leadership in the USA. This is important to improve her public rating which has been declining since winning the election.
Attributed to improving trends towards the later part of the year, Taiwan’s GDP is expected to recover slightly to 1% in 2016, from 0.6% in 2015. The improved momentum at the end of 2016 is expected to provide a better foundation to 2017 and GDP is expected to reach between 1.7% to 2% level.
GDP per capita reached USD 22,684 in 2017, up marginally from 22,044 in 2016.
Tourism and International Trade
The outlook is mixed in 2017 for Taiwan’s top two economic pillars, tourism and export.
Chinese tourist arrivals fell by 11.7% for the first ten months of 2016 and the trend is expected to continue in 2017. Despite fast growth of Korean and South East Asian tourist flow (increased by 17% and 12% respectively for the same period in 2016), Chinese tourist activity accounted for 40% of total tourists in 2015, particularly in the hotel, travel and services sectors. Twenty tour companies are reported to have gone bankrupt, and flights from China to Taiwan declined from 7,166 in July 2016 to 5,818 in Sept 2016.
Exports, in contrast, began to show signs of recovery since the second half of 2016. Export grew 12% to USD 24 billion in Nov 2016, reversing the declining export trend in the first half of the year, due to recovering global demand for smart phones and electronic parts. The trend is expected to continue in 2017.
Inflation is expected to hold at around 1.1% for both 2016 and 2017, up from a minus 0.3% in 2015, driven by overall global trends and a moderate economy recovery from second half 2016 to 2017. PMI reached 57% in Nov 2016 indicating a recovery of manufacturing and services activities.
FDI, ODI and Investment
Foreign direct investment (FDI) reached USD 10 billion for the first 10 months of 2016, driven by recovery of the electronic sector.
Outbound Investment (ODI) to China alone reached USD 17.8 billion for the same period.
Employment / Unemployment / Salaries
The unemployment rate is expected to decline slightly to 4% in 2017, following a trend of 3.9% set in 2016 and 3.8% in 2015.
Sectors adversely affected by the tourism fall-off — including hotel, travel, retail and services — are expected to continue to suffer from the sluggish environment in 2017. However, petrochemical, financial services and electronic and technology sectors are expected to recover in 2017 and see increasing demand for labor.
Need for Executive Search
We see increasing enquires from growth sectors especially in technology, ecommerce, life sciences and financial services. Demand in the hotel, tourism and related sectors is expected to be low in 2017.