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June 26, 2017

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Export orders see 1st dip in 6 months, slip 2.8% YoY

TAIPEI, Taiwan -- Export orders in January dipped 2.8 percent year-on-year, ending six consecutive months of growth, according to a report released by the Ministry of Economic Affairs (MOEA) yesterday.

Although the MOEA had predicted the January figure would decline, the drop was higher than expected, MOEA Statistics Department Director Lin Lee-jen (林麗貞) said.

Lin provided three reasons for the decline. First, export orders grew 18 percent in January last year, and therefore provided a high base period. Second, the Chinese New Year occurred in January, which might have impacted orders in the month. Third, sales in January are generally low, as it is one of the months of the off-season.

MOEA Forecast Growth Next Month

Nevertheless, the MOEA expects export orders to grow in February, as there are more working days in February this year than last year, and consequently, may take more orders. Lin said that she expects combined export orders in January and February to grow year-on-year.

Based on historical data, export orders are usually at their lowest point in the first quarter, followed by higher quarter-by-quarter growth, Lin said, adding that this holds true in the absence of major political or economic changes, such as the debt crisis that occurred in the eurozone in late 2009.

ICT and Electronics Sectors Grew

In terms of product lines, only sales of information and communication technology (ICT) products and electronics products improved in January, export orders of which grew 0.6 percent and 2.7 percent year-on-year, respectively.

Export orders for other product lines, precision instruments, base metals, chemical products, plastic products and machinery dropped 7.3 percent, 4.5 percent, 4.5 percent, 9.3 percent and 10.5 percent respectively.

In terms of major export markets, orders placed from Europe and Japan grew 2 percent and 1.6 percent respectively, compared with a year ago. Orders placed by mainland China and Hong Kong, the U.S. and ASEAN-6 countries (Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam) dipped 3.9 percent, 5 percent and 7 percent respectively.

Firms Predict Lower Sales in February

According to the MOEA survey, 19.1 percent of local firms expect to receive higher orders in February than in January, while 50.6 percent expect to receive an equal amount of orders and 30.3 percent expect fewer orders.

January's directional movement index for export orders stands at 44.4. The index for export order value stands at 39.5. A reading of above 50 in the index indicates an expected increase over the previous month.

As such, the MOEA forecast export orders to drop in February month-on-month. The reason is that there are fewer working days in February than in January, and consequently, will take fewer orders, Lin said.

The index for export order value for Taiwan's main three industries, the ICT sector, the electronics sector and the precision instrument sector, are pegged at 40.4, 44.1 and 29, respectively.

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