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Taiwan May export orders shrink for 4th month, China demand slows
Taiwan’s May export orders shrank for a fourth straight month, pointing to shaky global demand for its pivotal tech exports that could hurt the island’s economic growth.
The soft data, which roughly met expectations, underscores a further loss of momentum for trade-reliant Asian economies.
The government cut Taiwan’s growth outlook last month as it grappled with slowing demand from China, its largest export market, and as a recovery in the United States remained patchy.
Ten economists in a Reuters poll estimated export orders would fall 1.0 percent, with forecasts ranging between growth of 0.9 percent and a contraction of 2.5 percent. Orders in April shrank 1.1 percent, 6.6 percent in March and 14.5 percent in February.
Orders from its two biggest markets continued to grow but at a slower pace, with mainland China up 3.5 percent and the United States up 2.9 percent. Those from Europe and Japan were down 6.8 percent and 16.5 percent, respectively.
“Figures are within expectations, but with no signs of improvement. Taiwan’s semiconductors, panel and communications industries are doing well, but they’re offset by the weakness in traditional sectors such as steel and chemicals,” said Anita Hsu, analyst of Masterlink Securities.
“H2 will maintain at a flat level and the trend will be the same. I expect 0-5 percent annual growth,” she added.
Taiwan’s export orders are a leading indicator of demand for Asia’s exports and for hi-tech gadgets, and typically lead actual exports by two to three months. Electronics and components makers are hoping for a lift from recovering U.S. consumption but regional factory data has been spotty.
Activity in China’s vast manufacturing sector weakened further in June to a 9-month low as new orders faltered, a preliminary survey of purchasing managers showed on Thursday.
Earlier this month, Taiwan’s purchasing managers’ index for May also contracted for the first time in six months, pulled down by sharp falls in output and new business. (Reuters)
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