Sat, Sep 21, 2019 - Page 12 News List

Export orders decline 8.3 percent

EYE ON TARIFFS:Suppliers have gained fewer orders, as clients have become more conservative about consumer demand for high-end smartphones, an official said

By Kwan Shin-han  /  Staff reporter

Export orders last month fell for the 10th consecutive month, with an annual drop of 8.3 percent, the largest decline since February, due to lower demand for information and communications technology (ICT) products amid the US-China trade dispute, the Ministry of Economic Affairs said yesterday.

Export orders for ICT products dropped 9.7 percent from a year earlier to US$10.47 billion, the biggest fall since an 11.1 percent decline in February, the ministry said.

August is usually the high season for the industry, with local suppliers providing more new components for clients such as Apple Inc and Samsung Electronics Co, which launch products in September, the ministry said.

However, this year local suppliers gained fewer orders, as clients have become more conservative about consumer demand for high-end smartphones due to new tariffs to affect products in December and global economic growth slowing, Department of Statistics Director Huang Yu-ling (黃于玲) told a news conference in Taipei.

Orders for notebooks last month were also sluggish, as clients placed increased orders last quarter, hoping to avoid the tariffs, the ministry said.

As orders for notebooks from June to last month remained flat from a year earlier, the ministry was not worried about the decline last month, Huang said.

Orders for electronics decreased 5.4 percent annually, affected by decreasing prices of DRAM and passive components compared with a year earlier, while orders for IC designs and wafers improved, thanks to the development of 5G technology, the ministry said.

Orders for machinery equipment plummeted 26.2 percent year-on-year to US$1.63 billion, the largest fall since the sector began sinking in November last year, Huang said, adding that demand dragged as clients postponed or canceled expansion plans amid the trade dispute.

The ministry would continue to assist local machine tool makers to obtain new orders and help them negotiate with China Steel Corp (中鋼) to set reasonable prices for steel products, which would help stabilize those businesses, Huang said.

Orders for petrochemical and plastic products sank 19.2 percent and 10.1 percent year-on-year respectively to US$1.62 billion and US$1.84 billion as oil prices fell, the ministry said.

As more companies have relocated their production bases from China to Taiwan, the overseas production ratio dropped from 52 percent a year earlier to 50.4 percent, with the ICT sector falling from 94.0 percent to 90.5 percent, ministry data showed.

For the first eight months, export orders totaled US$303.43 billion, down 6.3 percent from a year earlier, the data showed.

The outlook for the next three months of this year is not upbeat either, Huang said.

“Export orders are forecast to continue falling through November due to a high comparison base last year and conservative market sentiment,” she said.

December might be the only month to report an annual gain in orders, on the back of sales of new smartphones and a low comparison base last year, she said.

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