The value of export orders dropped for a fourth straight month last month, and is expected to decline again this month, the Ministry of Economic Affairs said yesterday.
Export orders last month contracted 5 percent to US$36.29 billion from a year ago, with total orders in the first seven months of this year reaching US$253.33 billion, a decline of 2.1 percent from US$258.64 billion the previous year, the ministry’s data showed.
“Given that there are no significant growth catalysts this month, it is very likely that export orders will decline from last year’s high base of US$38.21 billion,” Department of Statistics Director-General Lin Lee-jen (林麗貞) told a press conference.
Photo: CNA
Orders for next month will still be lower than a year earlier due to a high base of comparison, but the figure may grow significantly from this month on the back of Apple Inc’s launch of its new generation iPhone models, benefiting Taiwanese supply-chain companies, Lin said.
Overall, export orders this quarter may be lower than the US$119.7 billion recorded in the same period last year, she added.
Export order value is an important gauge that should be watched closely ahead of the central bank’s quarterly policymaking meeting next month, DBS Bank Taiwan (星展銀行) said in a note prior to the release of yesterday’s export order data.
“If the July-August trade data shows convincing signs of improvement, it will support the view that the economy remains on a recovery path and therefore allow the central bank to hold rates steady at the next meeting,” DBS said in the note. “Should the upcoming trade data remain disappointing, the risks of a broader economic slowdown would increase and the odds of a rate cut would also substantially rise.”
The ministry’s latest data showed that export orders for information and communications items grew 8.4 percent annually to US$9.88 billion last month, thanks to increasing demand for handheld devices, wearable products and servers, despite the weak demand for PC-related products, Lin said.
Orders for electronics products also showed signs of improvement, with the size of annual decline narrowed to 0.6 percent from the previous month’s 6.7 percent fall, Lin said.
However, as the pace of semiconductor inventory digestion is still very slow because of slower economic growth in emerging markets, Lin remains conservative about the outlook for semiconductor orders this month.
“Taiwan Semiconductor Manufacturing Co (台積電) told the ministry that it expects to complete its inventory digestion next quarter,” she said.
Meanwhile, orders for precision instruments plunged 19.4 percent to US$2.18 billion last month from a year ago, mainly affected by declining orders for flat-panel products due to the rising supplies from China, and basic metals, petrochemicals and machinery products last month all faced double-digit percentage annual decline in orders, Lin said.
US was still Taiwan’s largest export destination, with orders growing 10.9 percent to US$10.22 billion from a year ago, the data showed.
Apart from the US, demand from all major export destinations fell from a year ago, Lin said. Orders from China plunged the most, 14.1 percent, to US$8.73 billion last month, the largest decline since June 2009, she said.
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