Exports contracted 9.6 percent last month from a year earlier, widening from a 6.5 percent fall in April, due to a record-high base in May last year and continued soft global demand, the Ministry of Finance said yesterday.
Outbound shipments have declined for 16 consecutive months and might remain in negative territory until global technology heavyweights launch new-generation gadgets and spur restocking demand, the ministry said.
Exports totaled US$23.54 billion last month, shrinking 9.6 percent from a year earlier, while imports posted a smaller decline of 3.4 percent to US$20.04 billion, the ministry’s monthly report showed.
“Despite the continued decline, the worst is likely over given the sharp pickup in capital equipment and electronic component imports,” Department of Statistics Director-General Yeh Maan-tzwu (葉滿足) told a media briefing.
The economic environment might soon brighten, as imports of capital equipment and electronic components usually stem from export needs, Yeh said.
Apple Inc is widely expected to unveil its iPhone 7 series in September, ramping up business for firms in its supply chain beforehand.
The resultant trade surplus was US$3.5 billion, down 33.9 percent from the same month last year, the report showed.
All product categories suffered, with the exception of container ships, which managed a 1.1 percent increase from a year earlier, the report indicated.
Exports of electronics declined 1.6 percent to US$7.23 billion, while information and communications shipments dropped 5.5 percent to US$2.52 billion.
Together, the two categories accounted for 41.4 percent of overall exports.
The pace of decline for both product categories eased markedly from a month earlier, signs of stabilization, Yeh said, adding that the contraction would have narrowed to 2.35 percent if the price factor was excluded.
Cheaper crude oil costs dragged export prices by 7.25 percent last month, government data showed.
Shipments to China, the largest export destination, dropped 10.2 percent annually to US$9.35 billion and shrank 13.1 percent to ASEAN nations, posing a challenge to the government’s “New Southbound Policy.”
Shipments to the US, the world’s largest end-market for consumer electronics, fell 8 percent to US$2.85 billion, improving from a 12.7 percent decline in April, the report said.
Exports to Europe increased, but growth decelerated from 10.4 percent to 2.1 percent.
Capital equipment imports, a crucial private investment gauge, soared 22.2 percent to US$3.79 billion, as local chipmakers sought aggressively to maintain their technological edge and prepare for capacity needs ahead, Yeh said.
Cumulative exports in the first five months declined 10.5 percent to US$108.45 billion from a year earlier, while imports contracted 10.9 percent to US$88 billion, the report showed.
Yeh expects the decline in exports to slacken to a single-digit percentage this month on the back of improving demand and stable crude prices.
The latest trade data raise chances of a further rate cut when the central bank holds a board meeting at the end of this month to review policy rates, Hong Kong-based ANZ senior economist Raymond Yeung (楊宇霆) said in a report.
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