TAIPEI (Reuters) – Taiwan’s export orders fell more than expected in their worst performance in six months in December, with the outlook for the island’s high-tech products remaining poor due to growing doubts about global economic growth.
Export orders last month slipped 16.0% from a year ago to $43.81 billion, the worst showing since July and well below the average analyst forecasts of a 0.25% decline predicted in a Reuters poll. Orders edged up 1.0% year-on-year in November.
Orders for goods from the island, home to tech giants such as chip manufacturer TSMC, are a bellwether of global technology demand.
Taiwan’s Ministry of Economic Affairs said it expects export orders in January to contract between 20.0% and 15.8% from a year earlier.
Huang Yu-ling, director of the ministry’s statistics agency, said the risk of a global economic downturn were increasing, making manufacturers “particularly conservative” about placing orders.
“The environment of high prices and high interest rates is still there, and there is still geopolitical uncertainty,” Huang said. “That will suppress consumption and investment in the short term, and interfere with the economic recovery.”
The ministry, in a statement about the export orders, also pointed to rising tensions in the Red Sea, which have forced shippers to divert around southern Africa, as a worrying factor for global trade.
However, it did point to the continued expansion of demand for high-performance computing and artificial intelligence applications.
Weak demand for Taiwan’s technology products amid global economic uncertainty has prompted the government to forecast that for 2023 the export-dependent economy will have grown at its slowest pace in 14 years.
Preliminary gross domestic product data is released at the end of this month.
Taiwan’s orders in December for telecommunication products fell 25.3%, and electronic products shed 12.9% from the prior year, the ministry said.
Orders from China dropped 3.5% compared with an 8.8% rise in the prior month. Orders from the United States dropped 21.6% compared with a 2.4% dip in November.
Orders from Europe sank 39.4%, faring worse than November’s 21.1% plunge.
From Japan, orders fell 30.5% last month, versus a contraction of 29.0% in November.
(Reporting by Jeanny Kao and Faith Hung; Editing by Ben Blanchard and Louise Heavens)
