TAIPEI, Aug. 31 (Xinhua) -- Recent economic data from Taiwan show a widening gap between a booming high-tech manufacturing sector and traditional industries that continue to struggle.
Industry groups and economists on the island say the persistent imbalances call for a more balanced allocation of industrial resources, so that the rapid expansion of one sector does not come at the expense of others.
That concern was highlighted in a 2026 report released last week by the Taiwan Federation of Industries, following a survey of 161 industry associations affiliated with the federation.
The report said Taiwan authorities have for years placed disproportionate policy emphasis on semiconductors and other high-tech industries. The policy bias has helped drive the tech sector's strong growth, with exports reaching record highs and wealth generated by the tech boom pushing up asset and housing prices. Meanwhile, workers in traditional manufacturing have faced stagnant wages and rising living costs.
The contrast, the report said, has created a veneer of prosperity in the statistics while exposing deeper structural strains in Taiwan's economy.
The latest trade and industrial production data show how the structural imbalances are playing out across industries.
Export orders for information and communications technology products jumped 89.5 percent in July from a year earlier, while orders for electronic products also posted strong growth, according to figures released by Taiwan's economic authorities.
By contrast, several traditional industries saw weak demand in July. Orders for chemicals and plastic and rubber products edged up only slightly year on year, while those for optical products fell by more than 10 percent.
The divergence was even more striking in industrial production. In July, Taiwan's output of computers, electronics and optical products surged 95.62 percent from a year earlier. Yet production in several traditional industries, including chemicals, fertilizers and automobiles, declined.
Taiwan's labor market also shows a structural mismatch. Taiwan's statistics authorities reported that the unemployment rate among people aged 15 to 24 stood at 11.71 percent in July, well above the overall unemployment rate.
At the same time, businesses continue to report difficulty finding workers. Some 76.6 percent of the industry associations surveyed for the 2026 report identified labor shortages as their biggest challenge, making it the top concern for the third consecutive year.
The coexistence of relatively high youth unemployment and widespread labor shortages points to a mismatch between the jobs being created and the skills available to fill them, according to Tsai Ming-fang, an economics professor at Tamkang University. As technology-driven sectors demand increasingly specialized skills, some job seekers face higher barriers to entering those industries, Tsai said.
The disconnect is particularly striking against the backdrop of Taiwan's strong economic growth.
Taiwan's statistics agency reported in late July that the island's gross domestic product expanded 12.92 percent year on year in the second quarter. With AI-related exports and investment continuing to surge, Taiwan is on course for potentially double-digit economic growth this year.
Yet promising prospects for economic growth have not translated into a comparable improvement in consumer sentiment. Taiwan's widely followed consumer confidence index stood at 65.01 in August, remaining well below 100, the threshold separating optimism from pessimism.
The report also highlighted the deep integration of industrial chains on both sides of the Taiwan Strait and the importance of the mainland market, calling on Taiwan authorities to support healthy and orderly cross-Strait exchanges and help Taiwan businesses better share in the opportunities arising from the mainland's development. Enditem
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