August 20, 2018 / 9:06 AM / a year ago

UPDATE 2-Taiwan's July export orders show solid growth on 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

* Full-year orders should set a record - ministry official

* Ministry says electronic product orders best for any July (Adds analyst quotes, context)

TAIPEI, Aug 20 (Reuters) - Taiwan’s export orders grew faster than expected in July, thanks to still-solid demand for electronic gadgets despite worries about global growth because of the trade disputes between the United States and China.

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

And analysts are hopeful that continuing demand for gadgets for Christmas and end-of-the-year shopping will keep orders growing.

“In the next two months, we will see (traders) rushing out shipments ahead of feared tariff increases due to the Sino-U.S. trade war,” said Woods Chen, chief economist at Yuanta Investment Consulting in Taipei.

July’s increase in order was more than twice the Reuters poll forecast of 3.3 percent - which was the high end of the government’s prediction of 0.7-3.3 percent growth. In June, orders shrank 0.5 percent.

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 laptops and smartphones. Taiwan is a major supplier to Apple Inc

Lin said she hopes export orders will set another record this year, surpassing last year’s $492.8 billion, thanks to strong tech demand.

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

Cheng Yu-liu, an analyst at First Capital Management, also sees resilient growth in August and September, thanks to Apple.


Traditionally, exports are bigger in the second half of the year due to product launches before Christmas.

Others, however, are less optimistic.

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 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, Yimou Lee and Roger Tung; Editing by Richard Borsuk)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below