January 20, 2016 / 9:11 AM / 4 years ago

UPDATE 2-Taiwan 2015 export orders in worst slide in 6 years, more rate cuts seen

* Export orders in 2015 post worst annual slide since 2009

* Dec orders fall for 9th month, worst decline since Feb 2013

* China Dec orders -8.8 pct y/y; U.S. -8.1 pct (Recasts, adds quotes)

By Faith Hung and Roger Tung

TAIPEI, Jan 20 (Reuters) - Taiwan’s export orders fell the most in six years in 2015 on weak global tech demand and a slowdown in China, cementing bets that the central bank will have to cut interest rates again.

The deeper-than-expected slump in orders in the final month of 2015 suggests weak growth momentum will likely have persisted in the fourth quarter and signals more weakness for the global tech industry.

Taiwan’s December export orders fell 12.3 percent on year, its ninth straight decline and the biggest percentage slide since February 2013. That brought orders for the whole of 2015 down 4.4 percent, the ministry of economic affairs said on Wednesday.

The monthly fall was worse than the 8 percent drop forecast in a Reuters poll and deteriorated from November’s 6.3 percent decline.

The full-year slump was the worst annual decline since an 8.33 percent slide in 2009. Total orders totalled $451.8 billion last year. In 2014, orders reached $472.8 billion due to a boost from Apple Inc’s iPhone.

“2015 orders fell 4.4 percent, marking the first negative growth in six years,” the ministry said in a statement. “Global economic momentum remained soft. Handheld device demand has weakened...oil prices continued to plunge.”

Taiwan’s export orders typically lead actual exports by two to three months. A lot of orders are sent to factories in China that are run by Taiwan companies, and from there are exported to end markets such as the United States and Europe.

MORE RATE CUTS

Economists expect Taiwan’s central bank to cut interest rates again after slashing them in September and December as global demand remained fragile and consumption was weak at home.

“Today’s data underscore our call for the CBC to act aggressively and further cut the policy rate in Q1 and Q2 2016,” ANZ said in a report, referring to the central bank.

Orders for information and communication products in December fell 12 percent on year, while orders for electronics products dropped 10.1 percent during the same period, the ministry said.

Orders from China fell 8.8 percent in December and were down 8.1 percent from the United States. Those from Europe and Japan also slumped 23.4 percent and 27.4 percent, respectively.

“The momentum remains weak this year, with less than 5 percent of year-on-year growth in 2016,” said Hsu Kuo-An, an analyst at Capital Securities, Taipei, ahead of the data.

“The global economic outlook is still sluggish, and Taiwan is losing out to Chinese rivals. A wild card is how strong the demand will be for the new iPhones Apple is set to launch in March.”

Editing by Jacqueline Wong

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