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UPDATE 1-Taiwan April export orders climb to 15-month high on tech demand
May 20, 2014 / 8:50 AM / 4 years ago

UPDATE 1-Taiwan April export orders climb to 15-month high on tech demand

* April export orders +8.9 pct y/y vs f‘cast 5.5 pct

* Orders from China +3.9 pct y/y; U.S. +5.7 pct

* Europe orders +6.9 pct; Japan orders +30 pct

* Factories, ministry don’t expect lower May output after Vietnam riots

By Miaojung Lin and Michael Gold

TAIPEI, May 20 (Reuters) - Taiwan’s April export orders grew at their fastest pace since January 2013, bolstered by strong demand for tech goods and brightening the outlook for Asia’s struggling export-reliant economies.

The island’s semiconductor and electronic component suppliers are expected to reap benefits from new releases of smartphones and tablets in the third quarter, while subdued demand from China will likely curb orders for capital goods.

The Ministry of Economic Affairs said on Tuesday that export orders in April grew 8.9 percent from a year earlier, beating a median forecast of 5.5 percent in a Reuters poll.

The figure represents an improvement from the 5.9 percent growth registered in March, which itself came in higher than expectations.

“Demand for mobile devices continues to rise, leading to increased orders for components like chips,” the ministry said in a statement. Taiwan’s export orders are a leading indicator for future demand of tech products worldwide.

Orders from China, Taiwan’s largest trading partner, rose 3.9 percent from a year earlier, while those from the United States saw a 5.7 percent gain.

Orders from Europe climbed 6.9 percent from the year before, while those from Japan leapt 30 percent.

“These numbers are a good sign of the competitiveness of the Taiwanese industry coupled with a steadily recovering global economy,” said Kevin Wang, a Taipei-based economist at Taishin Securities.

OUTLOOK MIXED

Actual exports, which trail export orders by one to two months, rose faster than expected in April, as shipments in the tech sector hit a new single-month record.

But Taiwan’s largest trading partners have painted a mixed picture of economic strength recently, with the United States reporting retail sales barely grew in April.

China’s exports and imports notched modest growth last month after a huge drop in March, but a senior commerce ministry official said on Tuesday it could miss its target for trade growth for a third consecutive year in 2014.

Meanwhile, recent turmoil at factories in Vietnam left many wondering whether output from Taiwanese-owned firms would be affected.

Thousands of Vietnamese set fire to foreign factories and rampaged through industrial zones in the south of the country in an angry reaction to Chinese oil drilling in a part of the South China Sea claimed by Vietnam. The riots were largely targeted at Taiwanese facilities mistaken by the protesters as being Chinese-owned.

The impact should be relatively muted, the ministry said, as firms shift lost production to other regions.

Hon Hai Precision Industry Co Ltd and China Steel Corp, two Taiwanese firms that had announced temporary work stoppages in Vietnam due to the riots, told Reuters their output in May from the country would not be lower than usual.

Most large Vietnam manufacturing houses, including those under Taiwanese management, have restarted operations or intend to return to work as soon as possible.

Exports capture shipments from Taiwan but export orders include those from Taiwanese factories operating abroad. (Editing by Jacqueline Wong)

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