Taiwan’s exports in the first two months of 2014 rose just a sliver from a year earlier, indicating that global demand for the island’s high-tech products remains tepid.
Exports in January and February combined were $45.6 billion, only 0.4 percent more than in the same period of 2013.
During February, exports grew 7.9 percent, lower than the median forecast of 9.0 percent in a Reuters poll but a rebound from January’s unexpected 5.3 percent on-year drop, which was blamed largely on the relatively early start of the Lunar New Year holidays in Greater China.
In the first two months of a year, measurements of Taiwan export changes from a year earlier can be skewed by when the Lunar New Year comes. In 2013, the holiday started in February.
Tim Condon, Singapore-based economist at ING, described the export number as “very weak” but said he doesn’t believe Taiwan is losing its competitiveness.
He noted that Taiwan exports have been about $25 billion a month for the last 36 months.
“I think it’s just a story of no export growth anywhere in Asia since 2011,” Condon said. “That’s the new state of the world. There’s been a significant slowdown in Chinese growth, that’s the new norm and will have a significant impact on world export growth.”
Taiwan’s finance ministry, in a statement said “demand for optical precision products was weak and the products’ supply glut continued, weighing on January-February exports.”
Exports to China, Taiwan’s largest market, increased 17.5 percent in February - compared with a 10.3 percent tumble in January - while those to the U.S. rose 4.7, similar to the previous month’s 4.6 percent rise.
For January and February together, exports to China were 1.2 percent higher than a year earlier.
In February, exports to Europe expanded 6.0 percent on-year while those to Japan slid 6.1 percent.
Imports in February rose 4.9 percent, against poll expectations of a 6.6 percent gain. For January and February combined, imports were $41.05 billion, 6.6 percent lower than a year earlier.
Export orders for Taiwan manufacturers, which can signal export results in subsequent months, surprisingly shrank 2.8 percent in January, as a lull after the 2013 year-end holidays dampened demand in its key markets. The decline raised concerns for its high-tech manufacturers. Export order data for February will be announced on March 20.
Taiwan remains at the center of the supply chain for products from global tech giant Apple Inc, which has been under pressure to follow-up on the success of its iPhone and iPad products with a new groundbreaking device. A weak revenue forecast from the firm could further hinder Taiwan’s tech exports going forward.
China continues to readjust from its heady double-digit growth model to a more sustainable pace, expanding by 7.7 percent in the fourth quarter of last year. Exports expanded Imports have also seen some upward momentum, expanding by 10.1 percent in January.
China’s February export and import figures are due to be released on Saturday. (Reuters)