News Room - Business/Economics

Posted on 25 Feb 2009

Taiwan export orders fall record 42%

Taiwan's export orders and industrial output posted record falls in January in further blows to the recession-hit island as the global slowdown evaporated demand for electronics, the economic ministry said Tuesday.

 

Export orders plunged 41.67 percent to 17.68 billion US dollars in the biggest fall since 1984 when the government started compiling figures, a ministry official said.

 

Industrial output in January also fell a record 43.11 percent from a year earlier.

 

The week-long Lunar New Year holiday and deteriorating international trade were blamed for the exports blow to Asia's sixth largest economy.

 

The fall, steeper than the 33 percent slide in December, was largely due to a decline in the key electronics sector, where exports tumbled 2.71 billion US dollars, or 38.85 percent year-on-year, the ministry said.

 

"This was because of the fall in demand for consumer goods," the official said.

 

A sharp decline in overseas demand for notebook computers has dealt a severe blow to the export-dependant island, which is the world's leading notebook computer manufacturer.

 

Analysts said the record fall was worse-than-expected but forecast February's figures should improve due the timing of the 2008 Lunar New Year, which fell in February.

 

"The figures were worse than we had forecast," Alex Huang of Mega International Investment Services told AFP.

 

"But then again, we're not pessimistic. These figures could be the worst, and the February export figures should pick up month-on-month," he said, referring to the relatively low comparison base in February.

 

Export orders from the island's biggest trading partner China, including Hong Kong, plunged 54.71 percent year-on-year to 3.66 billion US dollars.

 

Orders from Europe dropped a record 30.73 percent to 3.68 billion dollars, while orders from Japan were off 35.07 percent to 1.86 billion, the ministry said.

 

A great number of Taiwanese companies have shifted their production lines to China to cash in on its cheap labour and land and ship their China-made goods to the world's major markets such as the United States and Europe.

 

But when the global economic crisis hit, export orders slumped and the island's economy was hit harder than South Korea and the other competitor countries.

 

Taiwan plunged into recession in the fourth quarter of 2008 as gross domestic product fell 8.36 percent, while 2009 GDP is expected to contract 2.97 percent.

 

The economic woes have stepped up pressure on President Ma Ying-jeou, who won a landslide victory last March on a platform of boosting the flagging economy, vowing to achieve six percent annual growth, and bolstering ties with China.

 

His government has already unveiled an economic stimulus package worth some 15 billion US dollars in business incentives, infrastructure projects and shopping vouchers.