Taiwan’s exports last month declined by a marginal 0.6 percent from a year earlier to US$28.27 billion — still the third-highest level for March — as non-tech firms took a hit from an oil price slump, but electronics vendors benefited from inventory replenishment demand from China, the Ministry of Finance said yesterday.
The result was better than a 2 to 5 percent retreat the ministry projected last month, thanks to the smooth resumption of work in China, order transfers and employees working from home, the ministry said.
“It is not clear if the pickup in electronics sales will continue, as the COVID-19 pandemic is halting economic activity in Europe and the US, but demand for 5G deployment and artificial intelligence [AI] applications continues to gain momentum,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing in Taipei.
Photo: David Chang, EPA-EFE
Such factors might leave exports with 0.5 percent growth or a 2.5 percent contraction this month, Tsai added.
The pandemic and the tumbling price of oil weighed on shipments in almost all product categories by double-digit percentages, the ministry said in its monthly report.
Exports of plastic, chemical, base metal, machinery and electrical products reported declines of between 11.5 percent and 20 percent from a year earlier, the report showed.
Customers were hesitant to build up inventory as concerns over a global recession loom larger, the report said.
Shipments to the US dropped 3.1 percent, fell 2.1 percent to Japan and plunged 8.1 percent to Europe, where COVID-19 infections have been rising and authorities have shut down almost all nonessential businesses to combat the disease, it said.
Exports to emerging markets were resilient, increasing 3.4 percent to China and Southeast Asia, the ministry said, citing strong demand for information and communications technology products.
Exports of electronics rose 18.1 percent year-on-year to a record high of US$10.8 billion, with semiconductors mounting a 20.5 percent gain, the report showed.
“Demand for 5G deployment, high-performance chips and AI applications appear unharmed thus far,” Tsai said.
Electronics suppliers also benefited from teleconferencing, distance education and work-from-home technologies, Tsai said.
Imports squeezed a fractional 0.5 percent increase to US$25.48 billion, allowing Taiwan to retain a trade surplus of US$2.78 billion, the ministry said.
While imports of capital equipment dropped 12.7 percent to US$4.4 billion, Tsai said that the value was decent, based on historical comparisons.
For the first three months of this year, exports expanded 3.7 percent to US$78.7 billion, while imports increased 3.5 percent to US$69.17 billion.
Both results beat a forecast by the Directorate-General of Budget, Accounting and Statistics in February.
Looking ahead, the pandemic poses the biggest challenge that could curtail demand for the nation’s exports, Tsai said, adding that global research institutes expect an abrupt recession in the West and a deeper slowdown in China.
Major tech firms might shed more light on the landscape at their upcoming investors’ conferences, Tsai added.
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