TAIPEI: Export orders last month contracted at a slower-than-expected pace of 4.5 percent annually as Apple Inc’s new iPhone 6S series helped boost demand for electronic components and assembling services, the Ministry of Economic Affairs said yesterday.
Last month’s decline beat the ministry’s expectation of a double-digit percentage reduction. The momentum is expected to expand into this quarter, benefiting from restocking demand for the year-end holiday season in the US and Europe, the ministry said.
“The fourth quarter will be a better period than the third quarter because of seasonal demand. In addition, more smartphone brands are to launch new models,” Department of Statistics Director-General Lin Lee-jen told a media briefing.
That would help stabilize the nation’s export orders at between US$41 billion and US$43 billion per month over the next few months, which would reduce the nation’s export orders contraction this year to less than 5 percent annually, Lin said.
Lin previously expected export orders to drop at an annual rate of 10 percent this year.
“Last month’s figure is a bit better than we expected,” Lin said. “Launches of new mobile devices by global brands [primarily Apple] gave a boost to orders.”
Export orders last month dropped to US$41.5 billion, from US$43.31 billion in September last year, the ministry’s statistics showed. Last month’s figure was an 18 percent increase from US$35.03 billion in August.
Export orders in the third quarter grew 2.7 percent quarter-on-quarter, but decreased 5.9 percent year-on-year to US$112.66 billion.
During the first nine months of the year, export orders slid 3.1 percent to US$329.74 billion, compared with US$340.17 billion in the same period last year, ministry statistics showed.
Last month, the information, communications and technology (ICT) segment — primarily smartphones — was the only bright spot, with an annual growth of 5.4 percent, while the other six major segments, including electronic products, all continued their downward trend.
“Is it a risk to rely on the launch of new smartphones,” said Raymond Yeung , a Hong Kong-based senior economist with Australia and New Zealand Banking Group Ltd (ANZ).
“Excluding the ICT sector, export orders contracted 8.7 percent year-on-year last month, suggesting that overall external demand remained weak. A broader and more sustainable growth would still rely on the recovery of China, Taiwan’s largest trade partner,” Yeung added.
Ministry statistics showed that the US and Europe saw export orders rise 0.6 percent and 1.6 percent year-on-year respectively, while China, Japan and ASEAN saw declines.
Orders from China, Taiwan’s biggest export destination, last month saw an annual reduction of 9.8 percent, marking the eighth consecutive month of decline.
LCD panel makers suffered the brunt of sluggish demand from China, reflected by an annual contraction of 15.9 percent in the precision equipment segment last month, marking 11 consecutive months of decline.
Lin attributed the contraction to growing output from China-based panel makers and overcapacity-driven price decline.
Given the latest export order data, ANZ maintains its forecast that the nation’s GDP is to contract by 0.27 percent annually in the last quarter, which would be the first contraction since 2009.
Given a vulnerable global macroeconomy, Yeung predicted that the nation’s GDP would expand 1.3 percent annually this year, lower than the 1.56 percent growth estimated by the Directorate-General of Budget, Accounting and Statistics.
