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Export order growth slowest since SARS

Taiwan’s export orders grew 5.52 percent year-on-year last month to US$31.36 billion, the slowest pace since the SARS crisis of May 2003, because of weak demand from China, Hong Kong and the US, the latest report from the Ministry of Economic Affairs’ Department of Statistics showed yesterday.

Export orders, an indicator of actual shipments over the next one to three months, have posted single digit growth for two consecutive months, following June’s 9.27 percent gain.

Orders from China and Hong Kong grew 1.73 percent year-on-year last month to reach US$8 billion, the slowest growth since March 2005, after a 17.66 percent increase in June.

“The decline in orders from China is because of the fact that local Chinese companies have begun to self-manufacture the products that Taiwan exports to China. Also, the issuance of import permits has been delayed,” department director Huang Ji-shih (黃吉實) said at a press conference yesterday.

China’s exports to the US declined sharply in June and last month because of the US economic slowdown, Huang said.

US orders for Taiwanese products rose 3.21 percent last month from a year earlier, after falling 3.86 percent in June. Orders from Europe climbed 15.47 percent after rising 9.66 percent in June.

The value of last month’s export orders, at US$31.36 billion, remained the same as in June. By product, orders for information technology and communications products had the largest contribution, increasing 15.74 percent because of the growing acceptance of low-cost laptops.

Electronics orders gained 8.6 percent, down from 9.83 percent in June, and 21.42 percent from July last year.

Industrial production gained 1.1 percent last month from a year earlier. The manufacturing industry posted a 2.25 percent increase. The information and electronics industry climbed 11.76 percent and other industries declined.

“Third quarter GDP is not looking so good. To achieve the Directorate General of Budget, Accounting and Statistics’ forecast of 3.04 percent GDP growth this quarter, Taiwan will have to rely on the government to expand internal demand,” Cheng Cheng-mount (鄭貞茂), vice president and chief economist at Citibank Taiwan Ltd, said yesterday.
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