March 20, 2018 / 9:14 AM / 6 months ago

UPDATE 1-Taiwan's export orders post first decline in 19 months on Lunar New Year effects

* Feb export orders -3.8 pct vs +3.0 pct f’cast (Jan +19.7 pct)

* Jan-Feb export orders up 8.3 pct y/y

* China Feb orders down 1.8 pct, U.S. down 8.8 pct

TAIPEI, March 20 (Reuters) - Taiwan’s export orders in February unexpectedly fell 3.8 percent from a year earlier, mainly due to Lunar New Year distortions, although broader demand for the island’s technology sector appeared to remain intact.

Export orders in February stood at $32.45 billion, with the on-year pace easing from January’s 19.7 percent, data from Taiwan’s economics ministry showed on Tuesday. A Reuters poll had predicted a gain of 3 percent.

There were fewer working days in February compared with a year earlier as the long Lunar New Year break was in mid-February, while in 2017 it began in late January.

It was the first on-year decline in orders since July 2016.

For January and February combined, export orders in Taiwan’s trade-reliant economy totalled $75.52 billion, rising 8.3 percent from a year earlier, the data showed, slower that the 12.7 percent growth seen in the previous corresponding period.

Analysts prefer to look at combined January and February data due to distortions from Lunar New Year.

Export orders in Taiwan, a key player in the global technology supply chain, are seen as a leading indicator of actual shipments two to three months ahead and a gauge of demand for Asia’s high-tech gadgets.

“Even with the combined January-February export orders up 8.3 percent from a year earlier, it still shows the performance of February is slightly worse,” said Carl Liu, an analyst at KGI Securities. “This may affect April and May’s export performance, which will lead to weaker export growth in the second quarter.”

However, the decline in orders in February is not expected to change views that Taiwan’s central bank will leave its key interest rate unchanged at a policy meeting on Thursday.

Orders from the United States, where Apple Inc is a major customer for major Taiwanese technology component makers, fell 8.8 percent in February from a year earlier, but were up 4.4 percent for the first two months of the year.

Orders from China, the island’s biggest trading partner, were down 1.8 percent in February but 14.6 percent higher in January-February from a year earlier.

February orders from the European Union dropped 1.1 percent and were up 2.0 percent from Japan.

The economics ministry sees export orders in March rising between 20.2 percent and 23.3 percent from the previous month to about $39-40 billion, it said in the statement. It also expects export orders on-year growth of 3.3-4.2 percent in the first quarter.

With exports expected to drive economic momentum, Taiwan last month raised its 2018 economic growth forecast to 2.42 percent from 2.29 percent.

Reporting by Twinnie Siu and Jeanny Kao; Additional reporting by Emily Chan; Editing by Sam Holmes

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