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UPDATE 1-Taiwan May export order growth misses f'casts as regional demand cools
June 20, 2014 / 9:07 AM / 3 years ago

UPDATE 1-Taiwan May export order growth misses f'casts as regional demand cools

(Adds details, comments from ministry)

* May export orders +4.7 pct y/y vs Reuters poll +7.04 pct

* U.S. orders +3.3 pct, China +4.2 pct

* Japan orders +11.6 pct y/y, Europe +4.3 pct

By Michael Gold and Miaojung Lin

TAIPEI, June 20 (Reuters) - Taiwan’s export orders grew at a much slower pace than expected in May, as softer demand within the region and uncertainties in the global economy kept a lid on the island’s shipments.

The trade-reliant economy, one of the world’s biggest suppliers of technology products, is hoping that recovering growth momentum in the United States and Europe will help to partly counter a slowdown in its biggest trading partner, China.

Export orders in May grew 4.7 percent from a year earlier, the Ministry of Economic Affairs said on Friday, weaker than a median forecast of 7.04 percent in a Reuters poll.

Export orders had increased by 8.9 percent in April, hitting a 15-month high on strong tech demand.

“Electronics orders will continue growing, though flat panels and other precision products would be hit by the increasing capacity from China and low-priced competition from South Korea,” the ministry said in a statement.

Orders from China in May rose 4.2 percent from a year earlier, while those from the United States saw a 3.3 percent gain.

Orders from Europe climbed 4.3 percent from the year before, while those from Japan rose by a far slower 11.6 percent, pointing to signs of weaker demand in Asia.

Export orders lead actual exports by one to two months and are a leading indicator of worldwide demand for tech gadgets.

The numbers are in line with the outlook in rival exporters Japan, South Korea and Singapore, which showed significant softening in actual exports.

Taiwan’s actual exports in May also came in well below expectations, while imports - most of which are components used for re-exports - contracted. An unexpected fall in China’s imports last month signals likely weaker demand for Taiwanese factories, many of which operate on the mainland.

But many believe new product launches this fall from tech giants such as Apple Inc will be positive for suppliers and assemblers, many of which, such as Hon Hai Precision Industry Co Ltd, the world’s largest contract electronics manufacturer, are Taiwan-based.

Apple is expected to roll out both its next-generation iPhone this fall as well as its first-ever smartwatch, production of which will largely be handled by Taiwan’s Quanta Computer Inc.

Other indicators of global economic health have been a mixed bag recently. The Federal Reserve said on Wednesday that the U.S. economy was still on track for a steady recovery and that it would continue with the wind-down of its stimulus programme.

China is still growing at a healthy if subdued clip, the nation’s premier said recently, adding that the world’s second-largest economy would not suffer a hard landing.

The euro zone, on the other hand, remains mired in high unemployment and worryingly low inflation. (Additional reporting by Faith Hung; Editing by Jacqueline Wong)

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