Taiwan’s export orders fell 8.63 percent last month from a year earlier to US$31.48 billion, widening from a 0.72 percent contraction in December last year, the Ministry of Economic Affairs (MOEA) said yesterday.
Last month’s decline was mainly caused by fewer working days from the Lunar New Year holiday period, the ministry said.
According to Beatrice Tsai (蔡美娜), deputy-director of the ministry’s statistics department, export orders for precision machinery — namely LCD panels — plunged by 17.53 percent to US$2.4 billion amid oversupply.
Growth in information and communications product orders dropped 6.3 percent to US$7.57 billion, as consumers held off on their purchases amid product transitions, the ministry’s report showed.
Orders for electronics products were also down 6.17 percent to US$7.65 billion, it showed.
Export orders are an indication of Taiwan’s product and component shipments to overseas markets over the next one to three months. Last month’s 8.63 percent fall represented the biggest drop since August 2009, when export orders dropped 11.96 percent year-on-year, according to the ministry’s data.
US THE NEW NO. 1
In terms of the breakdown by country, the US overtook China to become Taiwan’s largest customer with a placement of US$7.82 billion in orders last month, indicating growth of 2.45 percent from a year earlier.
Tsai said the growth momentum of orders from the US showed that the US economy was on track for a stable and gradual recovery.
Other markets, however, all placed fewer orders with Taiwan, the ministry’s report showed.
China, the No. 2 sourcing market, placed US$7.29 billion in orders from Taiwan last month, marking a year-on-year dip of 20.83 percent.
Europe ordered 1.17 percent less at US$5.93 billion and Japan’s orders plunged 16.54 percent to US$3.08 billion.
Six ASEAN countries — Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam — ordered US$3.42 billion as a group from Taiwan, a reduction of 2.18 percent from last year.
“The headline figure contracted 8.63 percent year-on-year. However, on a sequential basis, it rose 2.63 percent month-on-month after seasonal adjustment, suggesting that the headline number was largely distorted by the Chinese [sic] New Year falling earlier this year,” Raymond Yeung (楊宇霆), a senior economist at ANZ Research, said in a note yesterday.
The seasonally adjusted monthly growth actually signaled an earlier recovery of external demand for Taiwan than previously expected and a recovery in Taiwan’s export orders is a bellwether for regional trade, he said.
“China’s accommodative monetary policy will help boost its domestic economy, [which will benefit Taiwan.] Also, the positive [presidential] election outcome will reinforce overseas buyers’ confidence in Taiwanese manufacturers,” he added.
Looking ahead, Tsai said export orders this month were likely to rise 20 percent from last month after factoring in that last year’s Lunar New Year holidays fell in February.