Exports last month fell 7.6 percent to US$25.07 billion, slipping back into contraction territory as the Lunar New Year holiday and the 2019 novel coronavirus outbreak have disrupted operations and limited order visibility, the Ministry of Finance said yesterday.
Although the results arrested two consecutive months of expansion, the ministry said that it remains optimistic, as the outbreak would weigh on, but not stifle a recovery in the technology product cycle.
“Fewer working days weighed on exports, but they might regain growth momentum from this month” in the absence of major downside risks, Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing in Taipei.
The outbreak has prompted China to lock down more than 30 cities in an effort to contain its spread, leading to halted operations at companies in the electronics supply chain.
“No one can accurately predict the effect of the outbreak as most Chinese companies do not return from the holiday until early next week or later, and the number of confirmed cases continues to rise,” Tsai said.
Formosa Plastics Group (台塑集團), the nation’s biggest industrial conglomerate, on Thursday said that its first-quarter revenue would be less than last quarter, while iPhone camera lens supplier Largan Precision Co (大立光) on Wednesday said that next month’s sales would be less than this month’s.
China accounts for 40 percent of Taiwanese exports, despite local companies’ efforts to reroute trade and realign supply chains to avoid US tariffs on Chinese goods, Tsai said, adding that firms selling electronics parts have greater exposure to the crisis than other sectors.
Without the virus disruption, exports this month would have staged a 20 percent rebound, given last year’s low comparison base, Tsai said, adding that last month’s outbound shipments would have expanded 2.6 percent without the holiday disruption.
All product categories experienced the impact of a seasonal slowdown, except for electronic components, which grew 2.9 percent on improving demand after the US and China signed a “phase one” trade deal, giving clients the confidence to add inventory, the ministry said.
In particular, semiconductor exports increased 6.7 percent, benefiting from 5G deployment and a demand for new smartphones and high-performance chips, the ministry said.
Shipments bound for all destinations declined, except for a 1 percent gain in shipments to the US, it added.
Imports fared worse, with a 17.7 percent decline to US$21.61 billion, leaving Taiwan with a trade surplus of US$3.46 billion, almost triple the amount from a year earlier, it said.
However, imports of capital equipment edged up 2.7 percent as local semiconductor firms vigorously bought new machinery to upgrade technology and expand capacity, the ministry said.
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