Taiwan’s exports in July probably grew 16.8% from a year earlier, the slowest pace in three months, due mainly to weaker electronics demand in the United States and Europe, a Reuters poll showed.
The median forecast from the survey put Taiwan’s exports at a record $24.7 billion for July, higher than $24.3 billion in June when growth was 21.3%. July’s pace of growth will be the weakest since April’s 13.9%.
“The coming data might be still quite strong, but we certainly look for single-digit export growth going into the end of the third quarter and fourth quarter,” said Frederic Neumann, an economist with HSBC.
“We observed the regional trend whereby exports are weakening quite rapidly and it’s really a phenomenon that has gained pace only the last several weeks,” Neumann said.
Analysts said demand from China and Southeast Asia was fairly healthy for now, but would likely slow for the rest of the year, pressuring Taiwan’s exports, a key driver of economic growth.
Taiwan’s orders in June grew 9.3% from a year earlier, the slowest since February 2007 due to sluggish demand from the United States and Europe, with analysts expecting the weakness to push exports growth to single digits in coming months.
Orders from the United States fell by an annual 3.86% in June, the first decline since March 2003 and a weakness that will filter through to actual exports.
Taiwan’s major tech companies, such as chip maker Taiwan Semiconductor Manufacturing Co and LCD manufacturer AU Optronics gave cautious outlooks for the third quarter mainly due to a global economic slowdown.
The island is a tech powerhouse that makes about 80% of laptops and about 40% of flat panel displays globally, while its integrated circuit industry contributes around 3% of its gross domestic product.
Taiwan imports rose an annual 14.3% in July, the slowest pace since January, to $23.7 billion. That yielded a trade surplus of $1.0 billion for July, lower than a $1.49 billion surplus in June. (Reuters)