The nation’s export orders last month suffered their sharpest drop since December 2001, accounting for a 5.56 percent year-on-year decline, figures released by the Ministry of Economic Affairs showed yesterday.
Export orders totaled US$30.41 billion last month, down 4.43 percent from the previous month, while those in the first 10 months totaled US$308.14 billion — an 8.92 percent gain from last year.
“October export orders typically reflect Christmas demand for major retailers in the US and Europe. Judging by the dismal numbers, we can reasonably infer that people over there are having a difficult holiday season,” the ministry’s statistics department director Huang Ji-shih (黃吉實) told a media briefing yesterday.
Cheng Cheng-mount (鄭貞茂), vice president and economist at Citigroup Investment Research, said a drop in US consumption was directly reflected in Taiwan’s export orders, as well as those in China.
“October numbers are bad globally, so I expected the same for Taiwan. The question is whether the economy will deteriorate or improve from now on,” he said yesterday.
This means that the same problem will be compounded in export orders in two countries, he said.
Orders from China, including Hong Kong, formerly the nation’s largest export market, fell for the third month to US$6.74 billion last month, registering a 22.84 percent year-on-year decline and reducing China to Taiwan’s second-largest export market next to the US over the past two months.
Orders from the US slid 6.99 percent year-on-year to US$7.05 billion last month.
Meanwhile, orders from Europe and Japan, the nation’s third and fourth-largest export markets, last month showed minimal increases of 0.65 percent and 2.75 percent from September to US$6.64 billion and US$3.55 billion respectively.
Among major export categories, export orders for precision instruments plummeted 20.48 percent year-on-year to US$2.27 billion, while orders for digital products declined 1.74 percent to US$7.40 billion. Bucking the trend, telecommunications products increased 11.90 percent to US$7.88 billion.
Industrial output also fared dismally last month, dropping 12.55 percent for the largest decline since September 2001. Manufacturing output declined by 13.32 percent, the ministry’s data show.
“The only sectors which showed growth were bicycles and pharmaceuticals. The rest are all negative,” Huang said.
Cheng said further deterioration was more likely than an improvement as the US economy was likely to bottom out in the fourth quarter.
While Citigroup’s GDP forecast for the nation is 3.6 percent this year and 2.8 percent next year, Cheng expects to revise his forecast downward by the end of this month.
“The unemployment figures worsened in October as well. I expect November to go slightly higher, but the dilemma facing the nation is a lack of external as well as internal demand,” Cheng said. “The NT$3,600 shopping vouchers will stimulate the economy, but they will not be enough.”
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