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Trade Trends News
24-01-2024
· December export orders -16.0% y/y vs. -0.25% forecast
· Orders from China up -3.5% y/y vs. 8.8% y/y last month
· The ministry expects January orders to be between -15.8% and -20.0% y/y
· Ministry of Foreign Affairs warns of geopolitical uncertainty
Taiwan's export orders fell more than expected in December, marking its worst performance in six months, as the outlook for the country's high-tech products remained poor due to heightened doubts about global economic growth.
Export orders slumped 16.0% year-on-year to $43.81 billion last month, the worst performance since July and well below analysts' forecasts of an average decline of 0.25% in a Reuters poll. Orders rose a modest 1.0% year-on-year in November.
Orders for goods from the island, home to tech giants such as chipmaker TSMC (2330.TW), opened the new tab and is a global leader in technology demand.
Taiwan's Ministry of Economic Affairs (MOEA) said it expects export orders to contract between 20.0 percent and 15.8 percent in January from a year earlier.
The risk of a global recession is increasing, making manufacturers "especially conservative" in placing orders, said Huang Yu-ling, director of the MIT's Bureau of Statistics.
"The environment of high prices and high interest rates still exists, and geopolitical uncertainties remain," Huang said. "This will dampen consumption and investment in the short term and disrupt the economic recovery."
In a statement on export orders, the ministry also pointed to heightened tensions in the Red Sea, which have forced shippers to turn to southern Africa, as a worrying factor for global trade.
It did, however, indicate a continued expansion in demand for high-performance computing and artificial intelligence applications.
Weak demand for Taiwan's technology products amid global economic uncertainty has prompted the government to forecast that the export-dependent economy will grow at its slowest pace in 14 years by 2023.
Preliminary gross domestic product data will be released at the end of this month.
Taiwan's Ministry of Economic Affairs said orders for telecommunication products fell 25.3 percent in December from a year earlier, while orders for electronics products were down 12.9 percent from a year earlier.
Orders from mainland China fell 3.5%, compared with an 8.8% increase the previous month. Orders from the U.S. fell 2.4% from November, down 21.6%.
Orders from Europe fell 39.4 percent, a worse rate than the 21.1 percent decline in November.
Orders from Japan declined 30.5 percent last month after contracting 29.0 percent in November.
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