Tue, Jan 25, 2005 - Page 11 News List

Export growth eases off; industrial output declines

CHINA SLOWDOWN The cooling off of the Middle Kingdom's gangbusters economy caused export orders to ebb, though they still grew 26% year-on-year

BLOOMBERG

Export orders grew more slowly last month and industrial production fell as an economic slowdown in China, the nation's biggest overseas market, curbed demand for cellphones, flat-panel displays and computer chips.

Orders -- indicative of shipments in one to three months -- rose 26 percent from a year earlier to US$19.8 billion after climbing 30 percent in November, the Ministry of Economic Affairs said in a statement.

Slowing export growth will make it harder for the government to achieve its goal of expanding Taiwan's economy 5 percent this year. It's also hurting earnings at companies including Chi Mei Optoelectronics Corp (奇美電子) and Tatung Co (大同).

Overseas orders for electronic goods rose 23 percent to US$4.2 billion last month after gaining 36 percent the previous month. Those for information technology and telecommunications equipment increased 19 percent to US$3.8 billion after rising 16 percent in November.

Chi Mei Optoelectronics, the nation's second-largest maker of flat-panel displays used in computers and televisions, on Jan. 7 said its sales last month fell 9 percent from a year earlier. The company on Dec. 23 cut its pretax profit forecast for last year by 39 percent to NT$18.4 billion (US$577 million).

Tatung, the nation's fourth-largest electronics maker, last month lowered its profit forecast for last year by 26 percent to NT$6.36 billion. The announcement came after Chunghwa Picture Tubes (中華映管), the country's third-largest flat-panel display maker, cut its profit forecast for last year by a third to NT$11.8 billion. Tatung owns more than half of Chunghwa Picture.

Industrial production fell 1 percent after increasing 5.4 percent in November, the ministry said.

For the whole of last year, production rose 9.8 percent and export orders jumped 27 percent. Those growth rates are expected to slow, Chang Yaw-tzong (張耀宗), statistics chief at the ministry, said at a briefing in Taipei.

"It's unlikely production and export orders will show double-digit growth this year," he said, citing slowing economic growth in the world's biggest economies.

The US government predicts growth in the world's largest economy will slow to 3.5 percent this year from a 4 percent annual rate in the third quarter of last year. In China, the economy will probably expand 8.5 percent this year, the central bank predicts. The government on Jan. 6 reported 9.2 percent growth for last year.

Orders from Hong Kong rose 20 percent last month to US$4.4 billion, compared with a 32 percent gain in November, yesterday's statement showed.

Sales to the US rose 37 percent to US$5.8 billion last month after gaining 34 percent in November, the statement said. Orders from Japan rose 49 percent last month to US$2.4 billion, compared with a 31 percent gain in November.

Export orders from Europe grew 20 percent to US$3.2 billion last month, after climbing 37 percent in November.

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