Taiwanese export order contraction likely to continue for seventh straight month in May

Taiwanese export orders saw a smaller than anticipated fall in April, owing to a recovery in information and communication. On a year-on-year basis, export orders dropped 3.7 percent. Transportation equipment orders also rose 8.7 percent year-on-year, for the first time in three months.

Nevertheless, export orders recorded the sixth straight month of overall contraction, with falls in the key sectors of chemicals, plastics and rubber products, machineries and electronic products. Throughout the region, exports to the U.S. and China shrank 6 percent and 9.9 percent on year-on-year basis. The rebound in orders is being driven by Europe and Japan.

The outlook for Taiwan’s export has increased uncertainties, as the U.S.-China trade negotiations threaten to disrupt the region’s electronics supply chain. Manufacturers in Taiwan are the main stakeholders in this chain, making up six of the top ten exporters in U.S.-China trade.

“Signs of a turnaround – suggested by a 25.1 percent rise the Philadelphia Semiconductor Index in April – are likely to be dampened by the latest trade negotiations. The Ministry of Economic Affairs survey suggests that the export order contraction may continue for a seventh consecutive month going into May”, stated ANZ.