Export orders fell to historic lows last month, with orders to China showing the sharpest decline of 45.38 percent year-on-year, the Ministry of Economic Affairs (MOEA) reported yesterday.
Export orders dropped 28.51 percent year-on-year to US$22.80 billion last month, the ministry’s latest data showed.
Among major export categories, export orders for precision instruments plummeted 51.12 percent year-on-year to US$1.40 billion, while those for basic metal products, digital products and information technology products declined 40.75 percent, 27.69 percent and 11.52 percent, to US$1.63 billion, US$5.30 billion and US$6.41 billion respectively.
Of the top three destination countries, shipments to China including Hong Kong showed the sharpest retraction last month and totaled US$4.55 billion, compared with a decline of 15.46 percent in orders from Europe for US$5.21 billion and a decrease of 29.29 percent in orders from the US for US$5.36 billion, the ministry’s tallies showed.
“This time around, the decline in export orders in terms of dollar amounts and year-on-year percentages both came in sharper than expected,” Huang Ji-shih (黃吉實), director at the ministry’s statistics department, said at a press briefing yesterday.
“The drastic decline in orders from China is the direct result of the drop in China’s industrial production growth from double-digits to low single-digits recently,” he said.
During the first 11 months of the year, export orders grew 5.13 percent to US$330.94 billion, ministry data showed. Huang attributed this growth to contributions made during the first half of this year.
The ministry official forecasts dismal numbers for this month but expects full-year export orders to come in “somewhere in the positive territory.”
Cheng Chen-mount (鄭貞茂), vice president and economist at Citibank Taiwan, echoed Huang’s assessments and said that “the link between Taiwan’s export orders and China’s industrial production is becoming clearer than ever.”
Cheng remains pessimistic going forward and expects further export order deceleration in the months to come, he said by telephone.
At yesterday’s briefing, the ministry said that domestic manufacturers also experienced a record decline in industrial production last month.
Major production indicators showed an across-the-board weakness, indicating that manufacturers slowed production in light of fewer orders amid the global economic slowdown.
Industrial production dropped 28.35 percent year-on-year and 19.57 percent month-on-month, the ministry data showed.
The decline was bigger than the 19 percent drop forecast by Moody’s Economy.com and widened from October’s 12.55 percent decline.
“A drop this large has never earlier been booked since the records began late 2001,” Tine Olsen, a Sydney-based economist at Moody’s Economy.com, wrote in a research note yesterday.
Of the five primary industries, construction engineering showed the sharpest decline of 31.54 percent in output year-on-year last month, followed by manufacturing sector’s 28.95 percent output reduction and mineral extraction sector’s 16.25 percent fall.
“The latest industrial production data warns of lower activity in the Taiwanese economy and likely higher unemployment, sending private consumption into a vicious circle,” Olsen said.
The government has recently adopted various monetary and fiscal policies to kick-start the slowing economy at home. But the Moody’s economist forecast a dim outlook for Taiwan’s economy next year.