Taiwan’s export orders again contract despite strong ICT

TAIPEI - Taiwan’s export orders contracted 5.3% y/y in October, compared with a 4.5% drop in the previous month. Sequentially, orders saw a small gain of 0.7% m/m after seasonal adjustment.  Other than ICT, orders for all major products continued to contract.

Orders for ICT increased 11.0% y/y in October, due to the launch of new smartphones in recent months. Other than ICT, the decline was broad-based, led by precision instruments (-24.5% y/y), machinery (-18.6%) and basic metals (-17.5%). Orders for electronics declined 4.0% y/y.
External demand continued to diverge by country. Export orders from the US grew 5.6% y/y to a record high in October, reflecting a recovery in the US economy. However, orders from Europe declined 2.1%. Demand from China and Hong Kong also contracted 10.6%, while that from ASEAN fell 10.4%. Orders from Japan plunged 24.4%.
ANZ Bank says that, overall, the external outlook remains soft excluding the impact of smartphones.  “While the smartphone supply chain could give the economy a small boost in the short term, the overall economy remains soft,” ANZ says.
“Given the downside surprise of Q3 GDP (-1.01% y/y) and the feeble external outlook, we expect the Government to revise its 2015 full-year GDP growth projection downward, from the current forecast of 1.56%.” www.live.anz.com (ATI).