March 20, 2014 / 9:37 AM / 4 years ago

UPDATE 1-Taiwan export orders rise less than expected in February

* Feb export orders +5.7 pct y/y vs f‘cast +8.9 pct

* Export orders inch up 1 pct y/y in Jan-Feb period

TAIPEI, March 19 (Reuters) - Orders for Taiwan’s exports rose less than expected in February, hurt by soft demand for the island’s tech products and indicating a weak start to the year for a pillar of the economy.

Export orders rose 5.7 percent in February compared with the same month last year, the Ministry of Economic Affairs said on Thursday.

The result undershot the median forecast of 8.9 percent growth in a Reuters poll of analysts and followed a 2.8 percent year-on-year decline in January.

In the first two months of 2014, orders inched up 1 percent from a year earlier.

Analysts said the timing of the Lunar New Year holidays - which fell in February last year but in late January this year - put a damper on January’s export orders and bolstered February’s orders on a year-on-year basis.

Orders from China, Taiwan’s largest trading partner, jumped 12.4 percent year-on-year in February, while those from the U.S. rose 2.3 percent. Orders from Europe were flat, but orders from Japan grew 15.2 percent.

“In China the consumer sector should see further demand down the line,” said Kevin Wang, an economist at Taipei-based Taishin Securities, pointing to rising salaries and economic reforms.

Taiwan’s export orders typically lead actual exports by one to two months.

Exports themselves grew 7.9 percent in February, after a 5.3 percent drop in January.

Taiwan’s tech sector, a bellwether of its exports and overall economic performance, is struggling to adapt to changing consumer tastes in electronic goods and a gradual saturation of former fast-growth areas like smartphones.

In February, smartphone vendor HTC Corp suffered a 37 percent year-on-year drop in sales, while sales at computer maker Acer Inc fell 12.9 percent.

But some have outperformed. Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract chip manufacturer, recently revised up its first-quarter revenue outlook on increased chip demand from clients. (Reporting by Faith Hung, Lin Miao-jung and Michael Gold; Editing by Chris Gallagher)

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