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May 28, 2017

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June export orders fall 2.62% in 4th consecutive decline

The Ministry of Economic Affairs (MOEA) announced yesterday that export orders in June was 2.62 percent lower than the same month last year, the fourth consecutive year-on-year decline.

The fall in June indicates that exports in the following months might also see yearly declines.

Electronic product orders saw the biggest decline, according to Department of Statistics Vice Director Tsai Mei-na (蔡美娜), who pointed to delay in demand of parts from the replacement of old products as to blame for the sector's US$340 million drop in orders.

The gloomy global steel market caused metal orders to decrease by US$330 million, and weak global demand also took its toll on petrochemical product orders, which declined by US$190 million. The downturn in orders of these three groups contributed to 87 percent of the yearly decline in June.

Seasonally adjusted export orders in the second quarter posed a quarter-on-quarter decline of 2.13 percent, which Tsai said is an uncommon occurrence.

Orders Decrease in All Major Trading Areas

Export orders for all five of Taiwan's major trading areas declined in June, including export orders from Association of Southeast Asian Nations (ASEAN) nations, Tsai said.

  Orders from China totaled US$9.09 billion, lower than the average of NT$9.2 billion over the previous two years.

U.S. export orders posted the first year-on-year decline since October 2009. The fall is partly because of unusually high export orders last June, said Tsai. Citing comments made by U.S. Federal Reserve head Ben Bernanke, Tsai stated that the ministry is keeping an eye on whether the economic recovery in the U.S. is slowed down by the European debt crisis. Information communication technology (ICT) product orders in June saw the largest yearly decline of US$110 million compared with other orders for the U.S. market.

Export orders from the European Union posted a yearly decline of only 0.39 percent, and orders of ICT products increased by US$230 million, but Tsai was not optimistic. "This is likely because the processors produced by Intel were out of stock in May, thus many orders of notebooks were delayed until June."

"Unemployment in Europe remains high, and thus people in Europe are not likely to (spend) a lot," stated Tsai. The euro has depreciated by more than 10 percent, making products in other currencies more expensive, added the vice director.

Export orders from ASEAN countries in June only decreased by 0.5 percent year-on-year.

ICT Products to ASEAN Increase

Orders of ICT products for last month increased by 2.01 percent over a year ago, the only increase of export orders of all products. Export orders of ICT products from ASEAN countries increased by US$170 million, or 17.1 percent year-on-year.

The yearly decrease of precision instrument orders was milder in June. Beijing started subsidizing energy saving products on June 1, which triggered a rise in demand of new televisions. This may in turn increase demand of panels from Taiwan, Tsai stated.

A separate survey of the ministry also indicates that the export order in the next quarter may increase. "Although fewer companies expect an increase of their orders, orders received by companies are larger in terms of value," said Tsai.

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