Thu, Mar 21, 2019 page12

• Export orders plunge amid low demand

  ‘TOUGH PERIOD’: The global smartphone market is reaching saturation and there is a longer replacement cycle, which negatively affects demand, an official said

  • By Lisa Wang / Staff reporter
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  Export orders last month dipped at a deeper-than-expected monthly pace of 28 percent, attributable to slumping demand for iPhones and computers, the Ministry of Economic Affairs said yesterday.

  A quick and steep recovery in the first half of this year is not expected, the ministry said.

  “The recovery will mostly happen in the second half, when global brands launch their new products,” Department of Statistics Director-General Lin Lee-jen (林麗貞) said by telephone.

  “As the worldwide economy remains weak, this year will be a tough period for local exporters,” Lin said.

  A ministry survey showed that export orders might pick up this month to between US$38.5 billion and US$39.5 billion.

  That still implies an annual contraction of 6.8 to 9.2 percent.

  The ministry forecast that in the first quarter, export orders might shrink by as much as 23 percent quarter-on-quarter, or an annual reduction of up to 8.5 percent.

  Export orders last month fell to US$28.9 billion, compared with US$35.5 billion in the previous month, missing the ministry’s estimate of between US$31 billion and US$32 billion, which would have translated into a monthly decline of 21 to 23.4 percent.

  On an annual basis, export orders last month shrank 10.9 percent, marking the fourth straight month of decline.

  “Smartphone sales worldwide fell short of our expectations, as the market is reaching saturation and there is a longer replacement cycle,” Lin said. “Weak demand for smartphones has reduced orders at local handset assemblers and component supply chains.”

  Hon Hai Precision Industry Co (鴻海精密), the main assembler of iPhones, was on Apple Inc’s top 200 suppliers list.

  Camera lens maker Largan Precision Industry Co (大立光) and passive component maker Yageo Corp (國巨) also made the list.

  An uptick in global crude oil prices did not provide a solid boost to orders for petrochemical products, Lin said.

  Demand for steel products only showed a lukewarm recovery, she said.

  Export orders for information and communications technology products last month fell at an annual rate of 11 percent to US$7.9 billion, as declines in smartphones and PCs offset growth in server and networking equipment orders, the ministry said.

  Slackening demand for smartphones also cut into orders for electronics, which slipped 8.1 percent annually to US$7.33 billion last month, it said.

  Optoelectronics orders last month dropped 8.8 percent to US$1.57 billion, attributable to a price decline in slow season and rising competition from China, the ministry said.

  Machinery goods orders last month plunged 24.5 percent to US$1.29 billion, as a US-China trade dispute has depressed demand from China, it said.

  Petrochemical orders fell 9.7 percent from a year earlier to US$1.62 billion, while plastic and base metal orders fell 9 percent annually to US$1.5 billion, it added.
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