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Taiwan exports slide again in October, off 1.5% y/y
Taiwan’s exports fell more than expected in October, as declines in shipments to China and the United States kept the island’s export machine sputtering, highlighting erratic global demand.
The Ministry of Finance said that Taiwan’s exports last month declined 1.5 percent from a year earlier, a bigger drop than the 0.68 percent contraction seen in a Reuters poll.
In September, exports were down 7 percent from a year earlier. And for November, the ministry warned that exports will be roughly flat.
“Exports just aren’t growing,” said Tim Condon, Asia economist at ING in Singapore. “There just is no export growth in Asia.”
South Korea, another pivotal tech exporter, saw exports rise 7.3 percent from a year in October earlier to $50.5 billion. . But Condon considers that a blip in the overall picture of Asian trade.
“2013 is going to be the year of basically zero trade growth in Asia,” he said.
In October, Taiwan’s exports to mainland China were down 4.9 percent and those to the U.S. were off 0.3 percent, compared to falls of 8.4 and 8.5 percent, respectively, for Taiwan’s biggest markets the previous month.
Exports to Europe were the only bright spot in October, up 6.7 percent.
October saw the trade surplus widen to $3.52 billion from September’s $2.35 billion, as imports in the month dropped 2.8 percent.
‘Huge’ Drop for Precision Products
The Finance Ministry said the October contraction was primarily because of a “huge decline” in exports of precision products, down 25 percent from one year earlier.
Taiwan’s manufacturing industry is a key player in the global supply chain for chips and consumer electronics. Major companies have reported mixed results for the third quarter.
TSMC, the world’s largest contract chipmaker, posted record profits though smartphone maker HTC booked its first-ever quarterly loss and computer vendor Acer Inc. said it would cut 7 percent of its workforce following a worse-than-expected loss.
Taiwan export orders, which typically lead actual exports by two to three months, in September rose by 2 percent from a year earlier, beating expectations of being flat. Orders from the U.S. jumped 7 percent but those from China declining 6.1 percent.
Orders from Europe, which have shown signs of modest recovery in recent months, lodged a 15.6 percent gain. Export orders typically lead actual exports by two to three months.
Rick Lo, senior economist at Fubon Financial Holdings in Taiwan, said the continued weakness of the island’s exports “demonstrates that the structure of our industry has a problem.”
Noting the growth in South Korea’s exports in October, and upturns in the U.S. and Europe, he said “it really looks our economy lacks competitiveness.” (Reuters)
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