The value of export orders dropped 5.9 percent annually and 4.1 percent monthly to US$35.79 billion last month, dragged down mainly by declining orders from China and Hong Kong, the Ministry of Economic Affairs said yesterday.
The value of orders from China and Hong Kong fell by US$1.17 billion from a year earlier to US$8.98 billion last month, accounting for 52.7 percent of the US$2.22 billion annual drop in overall export orders last month, the ministry said.
“The increasing localization of supply chains in China is an issue that we have to face seriously,” Department of Statistics Director-General Lin Lee-jen (林麗貞) told a news conference in Taipei, adding that last month’s data on orders from China and Hong Kong marked the fifth consecutive month of decline, excluding Lunar New Year holiday factors.
Weaker-than-expected growth in China has also affected demand for Taiwanese goods, Lin said. She said it would be worth observing if the annual decline in export orders from China and Hong Kong would extend throughout the year, citing the faster-than-expected rise of supply chains in China.
“Aside from flat panels, we noticed that Taiwan’s integrated circuit design, packaging and testing service sectors have also been facing increasing challenges in China,” Lin said.
In addition, the weak demand for PCs in Europe and handheld devices in emerging markets also affected the performance of the nation’s electronics and precision instruments industries, Lin said.
Apart from the information and communication technology industry, which saw a 2.3 percent annual increase in orders to US$9.7 billion, the ministry’s report showed broad declines in orders for electronics, precision instruments, basic metals, petrochemicals and machinery products last month from the same period a year ago.
By country, the US was still Taiwan’s largest export destination, with orders increasing 5.2 percent to US$9.79 billion from the same period a year ago, Lin said.
However, the annual growth rate for US orders was slower than the 14 percent registered a month earlier, an indicator of weakening demand as the product cycle for Apple Inc’s iPhone nears a refresh, Lin said.
Orders from China and Hong Kong, Europe, ASEAN and Japan all saw an annual decline last month, with orders from China and Hong Kong and Japan plunging by double-digit percentage points from a year ago, Lin said.
Lin said the ministry forecasts the value of this month’s export orders to be flat or decline from last month’s US$35.79 billion. As such, the value of export orders this month will likely decline from last year’s US$38.82 billion, she said.
The value of export orders totaled US$180.47 billion in the first five months of this year, 0.6 percent less than in the same period last year, the ministry’s data showed.
The total value for the first half of this year is expected to be less than the US$220.47 billion in the same period last year, Lin said.
However, Lin said the ministry remains optimistic on export orders in the second half of this year, citing the upcoming launches of Microsoft Corp’s Windows 10 operating system and new Apple products.
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