Taiwan’s export orders in October drop amid sluggish global economy

Export orders received by Taiwanese companies fell over 6 percent year-on-year in October due mainly to the slowdown in global economic growth cutting into demand, the Ministry of Economic Affairs (MOEA) said Monday.
Taiwan’s export orders for October totaled US$55.40 billion, down by 6.3 percent from a year earlier, marking the second consecutive monthly decline and the biggest fall since February 2020, but still the second-highest for the month in history, according to data compiled by the MOEA.
On a month-on-month basis, export orders dropped by 9.1 percent, the data indicated, and after seasonal adjustments the figure also declined by 4.3 percent.
In the first 10 months of this year, export orders rose by 4.4 percent from a year earlier to US$564.47 billion, according to the MOEA.
Taiwan’s exporters registered the fall in orders in October as rising inflation and interest rates in major countries around the world dented demand for some types of electronics and traditional goods, said Huang Yu-ling (黃于玲), head of the MOEA’s Department of Statistics, at a press conference.
The drop was also due to inventory adjustments by clients and a high base of comparison for the same period last year, Huang added.
However, the decline was offset to some extent by the launch of new smartphones by international brands and continued demand for emerging apps, digital transformation and data processing in the cloud, Huang added.
In the technology industry, the electronics sector saw export orders for October grow 9.6 percent year-on-year to US$18.86 billion owing to strong demand for emerging technologies such as 5G applications, high performance computing (HPC) devices and automotive electronics.
However, orders for information and communications technology products fell 0.3 percent year-on-year to US$18.45 billion as international smartphone brands unveiled new products and demand for digitization grew helping offset the fall in demand for other technology devices.
The optoelectronics sector saw export orders for October fall 43.4 percent from a year earlier to US$1.47 billion, according to the data.
In addition, major old economy industries posted double-digit declines in the month due to weakening demand.
Export orders received by the plastics/rubber industry in October fell 38.3 percent from a year earlier to NT$1.62 billion, while the base metals industry saw export orders fall 35.6 percent from a year earlier to US$2.10 billion.
The chemical industry also posted a 31.0 percent year-on-year decline in October, with export orders totaling US$1.51 billion.
Meanwhile, export orders taken by the machinery industry dropped 25.3 percent to US$1.69 billion, according to the data.
The ministry attributed the fall in orders received by old economy industries to many manufacturers turning cautious about equipment investment.
In October, orders placed by the United States and Europe rose by 1.2 percent and 4.3 percent to US$17.24 billion and US$14.11 billion, respectively, from a year earlier, while orders from ASEAN nations edged down 0.7 percent year-on-year, snapping 28 consecutive months of growth.
Orders from China and Hong Kong declined by 26.7 percent from a year earlier to US$10.50 billion, marking the seventh consecutive monthly fall.
Huang attributed the fall in orders placed by ASEAN nations to their export-oriented economies which she said are more vulnerable toa sluggish global economy and weakness in global end-user demand as well as a high base of comparison last year.
The MOEA data also showed that 53.7 percent of Taiwan’s export orders in October were produced overseas, an increase of 0.7 percentage points year-on-year, due mainly to growth in orders for technology products produced abroad and reduction in orders for overseas produced traditional goods.
Looking ahead, anticipated pent-up business opportunities for emerging apps such as automotive electronics, high-performance computing devices, and cloud data centers are expected to help maintain the growth momentum of export orders, according to the ministry.
Continuing demand for digital transformation and increasing stocking requirements for the peak year-end consumption season in Europe and the United States would also help bolster the country’s export orders, it added.
However, uncertainty created by the persistent pressure of global inflation and interest rate hikes, the ongoing war between Russia and Ukraine, and China’s ongoing zero-COVID policy could add to the downside for the global economy and hurt Taiwan’s export orders, according to the ministry.

Source: Focus Taiwan News Channel