UPDATE 1-Taiwan Jan export orders surge 18 pct on stronger global demand

Tue Feb 26, 2013 4:09am EST

* Export orders +18 pct y/y vs median +19.75 pct y/y in Reuters poll

* Total Jan and Feb orders seen up 5 pct on year - ministry

* Jan orders from Europe rise 21 pct y/y; from U.S. up 15.5 pct y/y

* Orders from largest export market China up 28.7 pct y/y

By Jeanny Kao and Clare Jim

SHANGHAI, Feb 26 (Reuters) - Orders for Taiwan's exports in January surged 18 percent from a year earlier, slower than expectations but powered by a jump in orders from China, its largest export market and providing further evidence that global demand for Asian goods is improving.

Trends in economic data across much of East Asia are hard to discern from January numbers alone due to the timing of the Lunar New Year holidays, when many companies shut for long holidays. The holiday fell in January last year but in February this year.

Double-digit growth in January was largely due to the distortions caused by the Lunar New Year, and total export orders for the months of January and February will be up 5 percent over the same period a year earlier, the Ministry of Economic Affairs said.

January's annual growth figure was slightly below the median forecast of 19.75 percent in a Reuters poll, and compared with December's 8.5 percent annual expansion. On a monthly basis, January orders fell a seasonally adjusted 3.2 percent from December.

Still, the data appears to indicate that Taiwan's economic recovery, albeit sluggish, remains on track.

"We expect Taiwan's growth in export orders this year will be in line with IMF's growth forecast on global trade of 4.8 percent," said Anita Hsu, analyst at Masterlink Securities.

Taiwan's export orders data is an indication of the strength of Asian exports and of global demand for technology products. They typically lead actual exports by two to three months.

"Even though it looks like the economy is going through a U-shape recovery, we think the central bank's rate policy will remain unchanged this year," said Jenny Huang, an analyst at Sinopac Financial

In January, orders from China leapt 28.7 percent from a year earlier, after rising only 2.4 percent in December. Orders jumped 21 percent from Europe, which underscored a continuing recovery in the debt-stricken region.

Orders from the United States in January rose 15.5 percent compared with 10 percent in December, according to ministry figures released on Tuesday.

Although uncertainties over the global economy continue to cloud the outlook, Taiwan expects export orders to improve in 2013 from last year as worldwide demand for handheld electronic devices such as smartphones remains strong, the economics ministry said last month, without giving a specific growth forecast.

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Taiwanese firms are the main suppliers to most of the world's top technology brands, including Apple Inc, Dell and Nokia. The heavy reliance on electronics exports makes the island's economy especially vulnerable to swings in external demand.

Taiwan's index for the most recent private purchasing managers survey hit a 10-month high in January, marking a second month of gains in total new export orders.

The island's exports in January rose 21.8 percent from a year earlier, their fastest growth in 21 months, propelled by exports to China.

But the export picture is mixed among fellow Asian tech exporters. South Korea earlier this week reported export growth has virtually stalled so far this year, while January exports for Japan climbed for the first time in eight months, spurred by the weaker yen.

"It will be difficult for Taiwan to keep the double-digit growth seen in the past due to changes in global economies and electronics products cycles. Growth in notebook computers is slowing," Hsu said.

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