Taiwan’s export orders for the whole of last year declined 1.1 percent annually to US$666.8 billion, ending two consecutive years of gains, as benefits from the COVID-19 pandemic faded and drastic interest rate hikes started to gain traction, the Ministry of Economic Affairs said yesterday.
Export orders for December tumbled 23.2 percent year-on-year to US$52.17 billion, as supply chains were affected by inventory adjustments and sluggish end-market demand, the ministry said.
However, December’s export orders fared better than expected, thanks to rush orders facilitated by China ditching its “zero COVID” policy, Department of Statistics Director Huang Yu-ling (黃于玲) said at a news conference in Taipei.
Specifically, demand for TV panels showed signs of stabilizing, she said.
Export orders, which foretell actual shipments one to three months beforehand, have contracted for four straight months on an annual basis.
The decline is forecast to accelerate by 32.1 to 35.5 percent last month, as the global economic slowdown drags on sales of consumer electronics, Huang said.
“Economic challenges loom, after driving the critical gauge to contraction zone for the whole of last year,” Huang said, adding that US-China technology disputes were among the downside risks.
Estimated at US$38 billion to US$40 billion, last month’s export orders could be pulled down by soft demand for electronics used in smartphones and notebook computers, Huang said.
Export orders could retreat, even though demand for advanced chips used in high-performance computing, 5G devices, electric vehicles and emerging applications remains healthy, she said.
The timing of the Lunar New Year holiday — which fell entirely last month — would also affect export orders for the same month, Huang added.
As for China’s economic situation, it would be better to postpone judgment until next month after the Lunar New Year holiday effect settles, Huang said.
Orders from Europe are expected to falter this quarter, while the US and ASEAN markets could benefit from the realignment of supply chains in the long run, despite inevitable short-term corrections, she said.
Taiwanese firms have been shifting manufacturing facilities to the US and Southeast Asia to reduce investment risks and meet customers’ requests for diversified production locations.
The effects of steep interest rate hikes might also increase, Huang added.
The US Federal Reserve is to announce its latest monetary policy Wednesday in US time, as economic data suggest inflation has lost momentum, but lingers.
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