Exports rise faster than expected

Taiwan's export orders and industrial output rose faster than expected in April, suggesting overseas demand for computer parts and mobile phones is strong enough to sustain an economic recovery.

Export orders in April rose 11.45 percent from a year earlier to US$12.91 billion due to burgeoning demand for electronics and communications products, official data showed yesterday.

Orders indicate shipments in two to three months.

The rise was fueled largely by 23.26 percent growth in information technology and communications goods and a rise of 26.29 percent in electronics products, the Ministry of Economic Affairs said.

Orders in the four months to April rose 4.3 percent to US$47.11 billion from the same period a year ago, it said.

A US economic rebound is spurring demand for flat-panel computer monitors, chips and mobile phones, pulling Taiwan out of its worst-ever recession and boosting sales at companies such as Lite-On Technology Corp (源興科技) and Taiwan Semiconductor Manufacturing Co (台積電). Orders will probably keep rising in coming months, analysts said.

"It's the beginning of a trend," said Franklin Poon, an economist at ABN Amro Asia Ltd, who expects the economy to grow 4 percent this year after shrinking 1.91 percent in last year. "The market has underestimated the strength of Taiwan's recovery."

Meanwhile, the ministry reported that April's industrial output grew 7.5 percent from a year earlier but was down 1.52 percent from March. The output in the four months to April rose 2.01 percent from a year earlier.

The ministry expected industrial output in the second quarter and for the full year as well as export orders for the full year to all grow by more than five percent, said Chang Yaw-tzong (張耀宗), statistics director at the ministry.

The ministry said export orders may rise more than 7 percent this year, and production growth will top 5 percent.

"The April export orders growth came as a surprise to us, suggesting a much better picture in the current quarter and for the whole year for export orders and industrial output than we thought earlier."

Chang last month projected a growth of less than five percent for 2002 export orders and a rise of no higher than three percent for industrial output.

Taiwan is counting on rising US orders to fuel a rebound. Export orders from the US amounted to US$3.89 billion in April, up 7.91 percent from a year earlier.

Last month's orders from Hong Kong rose 20.33 percent to US$2.72 billion. Most shipments from Taiwan to China go through Hong Kong, since direct trade links between the two are prohibited.

Orders from Japan surged 23.08 percent to US$1.46 billion and demand from Europe rose 3.29 percent to US$1.83 billion.

Orders for electronics, Taiwan's biggest export, rose 26.3 percent in April from a year earlier, following March's 3.7 percent gain, the ministry said. Orders for telecommunications equipment rose 23.3 percent.