News Room - Business/Economics

Posted on 25 Jul 2008

Taiwan's export growth decelerates in June

Taiwan's June export orders grew by the slowest pace in 16 months, as the battered U.S. economy overshadowed the strength of local exporters and rising orders from Maianland China (including Hong Kong), southeast Asia, the Ministry of Economic Affairs said Wednesday.

Export orders rose just 9.27 percent year-on-year to US$31.36 billion (NT$953.3 billion) . Orders from the US declined compared to June last year, dragging down overall export growth.

a€?In June, local manufacturers received from the American market a total of US$7.03 billion of business orders, which dropped US$280 million, or 3.86 percent compared with a year earlier, a€?said Huang Ji-shih, the director of the Minister of Economic Affairs' Department of Statistics.

According to the department, June's 9.27-percent growth put an end to a 15-month trend of double-digit export growth.

"The slowdown shows that Taiwan's export strength is still suffering from the impact of the weakened American consumer market, " said Huang.

While orders from the US maintained the second largest share (22.41%) of overall orders, that share dropped significantly from last June's 25.4%.

Taiwan's export to Mainland China, including Hong Kong, recorded a 17.66 percent growth to U.S.$ 8.7 billion, showing Taiwan's reliance on Mailand China market became even greater.

Such weaker performance of export confirmed the results of a May poll conducted by the department on local exporters' outlook on the business market. In that poll, 22.3% of respondents had a negative outlook on June's business climate.

Huang said his department expects the downturn to continue, since even more respondents -- 28.69% -- polled in June had a negative outlook for July's business climate.

"The department predicts that the growth rate of July's export orders may stay in the single digits," he said.

However, Huang said that export orders for the first half of the year still rose by US$22.88 billion, or 14.34 percent, to US$182.44 billion.

a€?Export orders for all of 2008 are expected to surpass US$360 billion," he said.

Huang said that one bright spot was export orders from southeast Asia. Orders from six major trading economies of the Association of Southeast Asian Nations (ASEAN) -- Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam -- have been increasing steadily.

Total export orders from these six countries hit US$2.639 billion in June, rising 2.88 percent compared with the May figure.

a€?In the near future, business deals with these six economies could surpass those from Japan,a€?Huang said.

Japan lagged behind China and the United States as the third largest destination of Taiwan's exports, with just US$3.1 billion of orders, or 9.89% of June's total.
 
According to economics ministry statistics, Taiwan's major exports are still competitive. These include electronics, information and communications products, precision instruments and metals. All recorded an average of more than 10 percent year-on-year growth in June.

Electronics and information and communication products remained Taiwan's top exports, with orders hitting US$7.09 billion and US$6.58 billion, respectively, in June.

Huang said the strong performance of such exports could allow Taiwan's overall export growth to go back into the double digits in August.