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June export orders slow compared to previous month

Export orders rose at a slower pace last month than May as higher global energy costs damped overseas demand for the nation's electronic products.

Export orders, indicative of actual shipments in one-to-three months, gained 20.61 percent from a year earlier to US$24.92 billion after surging 26.01 percent in May, the Ministry of Economic Affairs said yesterday.

That compares with a 20.6 percent median forecast of 14 economists surveyed by Bloomberg News.

Industrial production increased 5.54 percent last month from a year earlier after climbing a revised 8.6 percent in May, the ministry also said. That compares with the 7.3 percent median forecast in the Bloomberg News survey.

Vulnerability

The nation's dependence on exports, which account for about half of the economy, makes it vulnerable to swings in overseas demand.

A smaller expansion in the trade sector makes it more difficult for President Chen Shui-bian's (陳水扁) government to achieve its forecast of 4.31 percent economic growth this year.

Damping export orders, crude oil prices have jumped 26 percent in the past year, according to futures traded in New York. Prices reached a record US$78.40 a barrel on July 14.

Orders for electronics including semiconductors rose 22.15 percent last month from a year ago slowing from a 24.89 percent gain in May.

Orders for telecommunications products advanced 18.65 percent after climbing 25.36 percent in May, the statement said. Electronics are Taiwan's biggest overseas shipment.

Falling sales

Sales at Taiwanese companies such as AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子) declined last month.

Hsinchu-based AU Optronics, the world's third-largest maker of liquid-crystal displays for use in televisions and computers, said this month that sales for last month fell 9.6 percent from May to NT$18.2 billion (US$554 million).

Smaller rival Chi Mei said its sales for last month dropped 1 percent to NT$11.9 billion from the previous month. More than 80 percent of the two panel makers' products are shipped to overseas markets such as US and Europe.

Orders from the US rose 20.21 percent last month from a year earlier after increasing 14.82 percent in May.

Hong Kong

Orders from Hong Kong rose 31.07 percent last month from a year earlier after gaining 35.95 percent in May, according to the statement.

Most Taiwanese-made goods bound for China are shipped via Hong Kong because of transport restrictions between Taiwan and China.

Orders from Japan climbed 4.83 percent last month after increasing 6.67 percent a month earlier. Orders from Europe rose 29.68 percent last month after advancing 21.12 percent in May, the report showed.
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