Taiwan January export orders fall more slowly, downside risks remain

TAIPEI: Taiwan’s export orders in January contracted from a year earlier for a fifth month in a row, though at a slower pace, hit by a continued slump in Chinese demand and weaker global consumer spending due to inflation and interest rate rises.

The island’s export orders, a bellwether for global technology demand, had been 19.3 per cent lower than a year before at US$47.51 billion, the Ministry of Economic Affairs said on Monday (Feb 20). That beat analysts’ expectations for a 25.0 per cent decline.

January’s drop followed December’s 23.2 per cent annual fall, with last month’s orders also affected by the long Chinese New Year holiday, which fell in January in both Taiwan and China.

However, orders for telecoms products rose 9.8 per cent from a year earlier – the strongest rise since last June – thanks to an improving supply chain situation in China, the ministry said.

Orders for electronic products fell 21.8 per cent, though the decline was offset by demand for chips for high-performance computing and automobiles, it added.

Huang Yu-ling, director of the ministry’s statistics agency, told reporters that 70 per cent of more than 2,000 companies it had surveyed had seen no effect from the end of China’s pandemic controls, because demand in the general environment remained weak.

While semiconductor demand driven by new technologies would help orders in the traditional low season in the first quarter, “the downside risks of the global economy are still high, which may affect the performance of export orders”, the ministry said.

The ministry added that it expected export orders this month to be lower than in February 2022 by between 6.9 per cent and 10.8 per cent.

Taiwanese firms, such as Taiwan Semiconductor Manufacturing Co Ltd, are major suppliers to Apple Inc, Qualcomm Inc and other global tech companies.

Taiwan’s January orders from China were 45.9 per cent lower than a year earlier, versus the annual fall of 37.7 per cent seen in December.

China late last year largely abandoned a stringent zero-COVID policy that had led to widespread public frustration with lockdowns and damage to its economy, the world’s second-largest.

Taiwan’s orders from the United States in January fell 14.7 per cent from a year earlier, the exact same rate as in December.

Export orders from Europe rose 18.3 per cent, versus December’s annual fall of 23.9 per cent. Orders from Japan contracted 6 per cent.