May export orders down 13.96 percent

By Nick Land, The China Post

U.S. economic weakness and the global IT-crunch are having a serious impact upon Taiwan exports, especially in the information and electronics sectors, according to figures released by the Ministry of Economic Affairs (MOEA) on Friday.

May’s export orders — totaling US$11.497 billion — were down 13.96 percent from last year’s high base, and down 0.78 percent from April. MOEA attributed the decline to the collapse of semiconductor prices and subdued demand for high-tech products. Orders for IT/telecoms products were down 22.93 percent from May last year, with orders for electronics products down 21.56 percent over the same period. MOEA figures show May export orders from the U.S. down US$660 million, to US$3.63 billion, a year-on-year fall of 15.34 percent. U.S. orders for electronics products fell by US$240 million from last May, with orders for IT/telecoms products were down by an additional US$220 million, but U.S. machinery products orders were up by US$30 million.

Taiwan’s Asian trading partners also slashed their imports, with orders from Hong Kong down 9.07 percent year-on-year to US$2.24 billion, and orders from Japan down 14.4 percent to US$1.22 billion, with steep declines for base metals, IT/telecoms and processed foods.

The year-on-year shortfall in European orders was even more dramatic, declining 25.13 percent to US$1.64 billion, MOEA added.

The MOEA figures show May’s manufacturing output down 9.91 percent on last year, the most serious deterioration in recent months.

An MOEA survey of Taiwan manufacturers reveals 21.85 percent expecting an increase in export orders in June compared to May, 34.79 percent expecting orders to fall, while 43.36 percent anticipate no significant change. Manufacturers in the chemical and transportation equipment sectors were least pessimistic, with opinion roughly balanced. Elsewhere gloom predominated. MOEA head statistician Chang Yao-tsung sees little prospect of immediate relief, due to continued weakness of global demand and last year’s high base, but he expressed hope that the decline is bottoming out.

“Further downside in manufacturing output should be limited from here on, but it will likely remain around current low levels for some time. The soonest uptick is only likely to come in the second half of the fourth quarter if the U.S. economy and demand for semiconductors revive,” Chang said.

Chang added that he anticipated Q4 export orders stabilizing at around US$12 billion, with industrial output as a whole registering positive growth in October-December.