Taiwan’s export orders shrank more than predicted last month with weak demand and China’s ‘zero-Covid’ policy blamed for the downturn.
Export orders, a bellwether for global technology demand, slumped 6.3% in October from a year earlier to $55.4 billion, Taipei’s Ministry of Economic Affairs revealed on Monday. Analysts had expected a drop of 1%.
October’s fall – the steepest since January 2020, when it dropped 12.8% – followed September’s annual contraction of 3.1%.
Orders for telecoms products slipped 0.3% in October from a year ago because of weaker consumer demand, but also coming off a high base, the ministry said.
However, orders for electronic products rose 9.6%, driven by demand for high-end computing, automobiles and stockpiling ahead of the end of the year, it added.
There were also many clouds ahead, despite “growth momentum” from automotive electronics and data centres ahead of the year-end holiday season in Western markets and January’s Lunar New Year holiday in East Asia, it added.
“Global inflation and interest rate pressures continue to be high; the war between Russia and Ukraine, and mainland China’s insistence on the zero-Covid policy, will add uncertainty to the economic outlook, which may affect performance of export orders,” it said.
The ministry added that it expected export orders this month to be lower by 14.5% to 17.6% than in November 2021.
Taiwanese firms, such as Taiwan Semiconductor Manufacturing Co Ltd, are major suppliers to Apple Inc, Qualcomm Inc and other global tech companies.
Taiwan’s US Orders Edge Up
Taiwan’s October orders from China plummeted 26.7% from a year earlier, versus September’s annual fall of 27.9%. Month-on-month orders from China dropped 9%.
China has stuck to its stringent zero-Covid approach, even as other nations have eased curbs. That has led to widespread public frustration and damage inflicted on the world’s second-largest economy with lockdowns, some in key industrial areas.
Taiwan’s orders from the United States edged up 1.2% from a year earlier, slower than the rise of 2.8% the previous month.
Export orders from Europe rose 4.3%, versus September’s annual rise of 9.6%. Orders from Japan expanded 8.5%.
- Reuters with additional editing by Sean O’Meara