August 20, 2018 / 9:01 AM / 2 months ago

Taiwan July export orders show solid growth on strong tech demand

* July orders +8.0 pct y/y, vs +3.3 pct Reuters poll forecast

* Orders from U.S. +8.4 y/y; China +12.5 pct

* Ministry says electronic product orders best for any July

* Orders from U.S., which shrank in June, rose 8.4 pct y/y

TAIPEI, Aug 20 (Reuters) - Taiwan’s export orders grew faster than expected in July, despite worries about trade frictions, thanks to strong global demand for smartphones and other hi-tech electronic gadgets.

Orders for trade-dependent Taiwan rose 8 percent from a year earlier to $41.8 billion to a record high for July, Ministry of Economic Affairs data showed on Monday.

A Reuters poll forecast a 3.3 percent increase, and a month ago - when announcing a 0.5 percent contraction for June - the government predicted a 0.7-3.3 percent July advance.

Taiwan’s export orders are a leading indicator of demand for Asia’s hi-tech gadgets and other shipments, and typically lead actual exports by two to three months.

“Orders for telecommunication, electronic and machinery products all hit record high for the month in value terms,” ministry official Lin Li-chen said.

She said the strong growth was attributed to a recovery in global demand for tech gadgets including laptop, smartphone and server.

The government forecast an increase of 2.5-5.0 percent in August.

DBS economist Nathan Chow, in a note published on Monday before the data release, warned of risks for Taiwan’s exports due to a faster-than-expected slide in China’s manufacturing activities in July as trade-war uncertainties increase.

Demand in China, Taiwan’s biggest trading partner, is already slowing due to rising borrowing costs and a crackdown on riskier lending.

Orders from the United States, where Apple Inc is a major customer for major Taiwanese technology component makers, rose 8.4 percent in July from a year earlier. In June, they fell 4.3 percent.

Those from China increased 12.5 percent in July, compared with rising 5.8 percent the previous month. Orders from the European Union and Japan rose 6 percent and 2 percent, respectively.

Taiwan last week raised its 2018 economic growth forecast for the third time this year, and nudged up its 2018 export growth forecast to 6.39 percent from a previous forecast of 6.36 percent. (Reporting by Emily Chan and Yimou Lee; Editing by Richard Borsuk)

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