Taiwan’s export orders returned to year-on-year growth in August as strong demand for electronic gadgets offset weakness seen among old economy industries at a time of skyrocketing inflation and rate hikes by major central banks around the world, the Ministry of Economic Affairs (MOEA) said Tuesday.
Data compiled by the MOEA showed the country reported its highest ever export orders for August at US$54.59 billion, up 2 percent from a year earlier, reversing a 1.9 percent year-on-year fall in July.
On a month-on-month basis, Taiwan’s export orders rose 0.6 percent, the dat indicated, and after seasonal adjustments, the figure also increased 1.6 percent.
In the first eight months of this year, export orders received by Taiwanese exporters rose 7.0 percent from a year earlier to US$448.14 billion, according to the MOEA.
The strong showing by the electronic components industry served as an anchor allowing Taiwan’s export orders for August to recover from the previous month’s weakness, while major old economy industries posted a double-digit decline in the month due to weakening demand, the ministry added.
In August, the electronic components industry received US$19.04 billion worth of export orders, up 15.4 percent from a year earlier, the MOEA said.
The ministry attributed the increase to pure wafer foundry operators, memory chip suppliers, printed circuit board makers, and IC testing and packaging services providers receiving a boost from strong demand for emerging technologies such as 5G applications, high performance computing (HPC) devices and automotive electronics.
In the information and communications technology industry, export orders for August rose 3.1 percent from a year earlier to US$14.27 billion as international smartphone brands unveiled new products and demand for digitization and Internet communications grew, pushing up business opportunities, according to the MOEA.
The optoelectronics industry, however, bucked the upturn and saw export orders for August fall 36.5 percent from a year earlier to NT$1.75 billion in the wake of falling demand for TVs and notebook computers, the ministry said.
It added that flat panel suppliers in the optoelectronics industry also suffered pricing power weakness amid inventory adjustments among their clients.
According to the MOEA, old economy industries were most impacted by downside risks in the global economy as major central banks in the world raised key interest to take on inflation.
In August, export orders received by the base metals industry fell 22.6 percent from a year earlier to NT$2.38 billion largely due to falling global demand for steel products, while export orders taken by the machinery industry dropped 15.2 percent to US$1.91 billion as many manufacturers turned cautious about equipment investment, the MOEA said.
The plastics/rubber industry saw export orders fall 25.3 percent from a year earlier to US$1.94 billion on inventory adjustments, while the chemical industry also suffered demand weakness and posted a 13.0 percent year-on-year decline in August, with export orders totaling US$1.75 billion, according to the ministry.
Looking ahead, the MOEA said uncertainty created by rising inflation, the on-going rate hike cycle, China’s zero tolerance COVID-19 policy, and geopolitical tensions resulting from the war waged by Russia against Ukraine is expected to continue to impact global demand.
In addition, a relatively high comparison base over the same period of last year could also hurt growth in September, the MOEA said.
The MOEA forecast that Taiwan will see a 7.0 percent to 9.4 percent year-on-year fall in export orders in September with total exports expected to range from US$57 billion to US$58.5 billion.
Source: Focus Taiwan News Channel