Taiwan export orders rose for fifth-straight month

Orders, an indication of shipments in the next one to three months, advanced 36.3 percent from a year earlier, after a 71.8 percent increase in January, the Ministry of Economic Affairs said in Taipei yesterday. The median estimate of nine economists in a Bloomberg News survey was for a 30.7 percent gain.

Taiwan is emerging from its deepest recession on record, with the economy expanding 9.2 percent in the three months through December after five consecutive quarters of contractions. Gross domestic product will increase 4.65 percent in 2010, the Taipei based Polaris Research Institute said this week, as companies such as Taiwan Semiconductor Manufacturing Co. and AU Optronics Corp. hire staff to meet rising international demand.

“There is a solid recovery going on, and it's going to continue in the second half,” said T.J. Bond, a Hong Kong-based economist at Bank of America-Merrill Lynch. “There is going to be a decent recovery in final demand in the U.S. We don't expect much of a slowdown in China even with the tightening measures.”

Taiwan's President Ma Ying-jeou is negotiating a trade accord with China that would cut import duties on Taiwanese goods in the world's fastest-growing major economy and help cement the recovery.

A pickup in the U.S., the world's biggest economy, also boosted demand from other Asian exporters. South Korea's overseas shipments rose for a fourth month, climbing by 31 percent in February. Japan's large manufacturers were optimistic for a third consecutive quarter, according to a government survey released Thursday in Tokyo.

Stronger demand for electronics promoted Taiwan Semiconductor, the island's biggest company by market value, and AU Optronics to announce plans to hire more staff this year.

Central Bank Governor Perng Fai-nan told lawmakers this week that consumer prices are in an “acceptable range.” That suggests the bank will keep interest rates unchanged at a record-low 1.25 percent on March 25, when the board is due to hold its quarterly policy meeting, to boost investment and consumption, said Alan Liao, an economist at Chinatrust Commercial Bank in Taipei.

Morris Chang, chairman and chief executive officer of Taiwan Semiconductor, said last week the chipmaker will hire 2,400 full-time employees to replace contract workers, in addition to the 3,000 engineers it plans to hire this year.

AU Optronics, Taiwan's second-biggest maker of liquid- crystal displays, said last week it plans to hire 2,500 new employees this year.

Yesterday's figures were released after the close of trading on the stock exchange. The Taiex index rose 0.2 percent to 7,897.91.

The Polaris Institute, a private research group, forecast Thursday that the local currency will gain to NT$31.60 against its U.S. counterpart this year.

The value of export orders dropped to US$27.4 billion last month from US$30.4 billion in January, yesterday's report showed.

Export orders from China and Hong Kong combined increased 49.4 percent last month, after a 135 percent gain in January. Orders from the U.S. climbed 13.5 percent from a year earlier, after a 41.8 percent rise in January.

Demand from the U.S., Taiwan's second-largest export market, is improving and Federal Reserve officials said this week the American economy has “continued to strengthen.”

Orders for electronics rose 40.9 percent last month, after a 74.2 percent increase in January, yesterday's report showed. Demand for information technology and communications products climbed 43.8 percent in February, after increasing 73.3 percent a month earlier.

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