Financial and Technology News

Contraction deepens, exports in decline

 2015/12/14
WEAK DEMAND:An anticipated boost from global sales of handheld devices has not manifested and, for the eighth consecutive month, exports are in decline.
 
The nation’s export orders declined at a faster-than-expected rate last month, due mainly to weak international notebook computer demand and a continued semiconductor inventory correction, the Ministry of Economic Affairs said yesterday.
Export orders dropped 6.3 percent annually and 4.2 percent monthly to US$40.76 billion last month, ministry data showed.
The monthly result marks the eighth consecutive month of annual decline, falling deeper than the ministry’s previous estimate of a 2.2 percent year-on-year contraction, the ministry said.
“Demand for international brands’ handheld devices was not strong enough to offset the weakness of notebook demand from Japan and Europe,” the ministry’s Department of Statistics director-general Lin Lee-jen told a news conference.
Orders for information technology and communication goods products, the pillar of the nation’s export orders, dropped 0.4 percent from a year earlier, Lin said.
This is the first time orders from this segment have swung into annual decline after 15 months of growth, Lin said. She attributed the reduction to weak notebook demand compared with the same period last year.
In addition, orders for the nation’s electronics goods fell 2.6 percent from a year earlier due to semiconductor inventory correction and a continued decline in television orders from Japan, Lin said.
Orders for precision instruments, basic metals, petrochemicals, machinery goods, and plastic and rubber goods all fell from a year earlier because of a weak international economy and falling prices of oil and stainless steel, Lin said.
Orders from the US remained flat from a year earlier. Other export destinations, such as China, Hong Kong, Europe, ASEAN nations and Japan, declined from last year, she said.
However, on a monthly basis, export orders from the US plunged 10.2 percent from a year earlier due to a higher base of information technology and communication goods demand last year and dropping prices of basic metals, Lin said.
Citing a survey conducted by the ministry, Lin said export orders this month would decline from last month and stand at between US$39 billion and US$40 billion.
“That means this month’s export orders are expected to fall by about 10 percent from last year’s US$44.23 billion,” Lin said.
Lin said the ministry expects annual export orders this year to drop by between 4 percent and 5 percent from last year’s record high of US$472.8 billion.
The estimated scale of annual decline for this year would mark the largest scale of decline since the financial crisis of 2009, she said.
Lin said that as the ministry foresees some negative factors extending into the first quarter next year, the ministry thinks it would be challenging for export orders to turn from annual decline to annual growth for the January-to-March quarter.
Adverse factors include low oil and stainless steels prices, fierce international competition and an uncertain outlook for the international economy next year, she said.
Lin said that, on the bright side, the demand for Apple Inc’s iPhone models and the momentum of shipments requests for the Lunar New Year holiday might slightly offset the weakness for other products.
Back