Export orders in Taiwan fell from a year earlier in July, ending the year-on-year growth seen in the previous two months and missing an earlier forecast, with global demand impacted by rising inflation, the Ministry of Economic Affairs (MOEA) said Monday.
Data compiled by the MOEA showed export orders for July totaled US$54.26 billion, down 1.9 percent from a year earlier after a 6.0 percent year-on-year increase in May and a 9.5 percent rise in June.
The July export orders missed an earlier MOEA forecast, which said the figure would range from US$55.5 billion to US$57.0 billion, up 0.4-3.1 percent from a year earlier.
On a month-on-month basis, Taiwan’s export orders fell 7.8 percent, and after seasonal adjustments the figure was also down 9.1 percent, the data indicated.
In the first seven months of this year, the country’s export orders rose 7.8 percent from a year earlier to US$393.55 billion, the ministry said.
“Escalating inflation has taken global demand hostage,” said Huang Yu-ling (???), head of the MOEA Department of Statistics. “Demand for tech items has fallen and we are surprised by a weaker-than-expected performance in orders for consumer electronics products in July.”
“A decline in demand prompted customers of Taiwanese exporters to adjust inventories, which scaled back their orders in the month,” Huang said.
In July, the information and communication industry felt the pinch resulting from weakening demand for consumer electronic gadgets, with export orders falling 0.8 percent from a year earlier to US$14.96 billion, the MOEA said. The July figure was down 11.7 percent from June.
However, the electronic components industry appeared resilient, reporting an 8.8 percent year-on-year increase in export orders which hit US$17.78 billion as demand for emerging technologies, such as 5G applications, high performance computing devices and automotive electronics, remained solid, pushing up export orders for semiconductor suppliers, the MOEA said. Nevertheless, the July figure was still down 5.2 percent from June.
The optoelectronics industry even saw export orders plunge 37.4 percent from a year earlier to US$1.73 billion in the wake of inventory adjustments by international brands and the oversupply of flat panels, the MOEA said.
Inflation also cost the old economy sector as seen by weakening demand, Huang said.
In July, export orders in the base metals industry plunged 24.8 percent from a year earlier to US$2.56 billion largely in the wake of falling steel prices, while export orders received by the machinery industry also fell 15.8 percent from a year earlier to US$1.95 billion, as a result of rising inflation worldwide and the slowdown of the Chinese economy, the MOEA said.
In addition, the plastics/rubber industry and the chemical industry recorded a 26.3 percent decline, and a 2.6 percent drop year-on-year in export orders, respectively, to US$1.95 billion and US$1.98 billion in July, according to the MOEA.
“Inflation is expected to continue to affect global demand, while the war in Ukraine, cross-strait tensions, increasing competition between Washington and Beijing, and COVID-19 lockdowns in China with power rationing in Sichuan province could add more downside risks to the global economy,” Huang said.
Taking into account those uncertainties, Huang said, the MOEA estimates export orders for August will range between US$51.5 billion and US$53.0 billion, down 0.9-3.7 percent from a year earlier, and also down 2.3-5.1 percent from July.
Source: Focus Taiwan News Channel