Export orders may have fallen 41% in Jan
Updated: 2009-02-21 07:51
(HK Edition)
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TAIPEI: Taiwan's January export orders probably slumped by a record 41 percent from a year earlier, indicating that weaknesses in the United States, on the mainland and in Europe are continuing to beat down Asia's export-reliant economies.
A Reuters poll of 11 economists showed that January export orders posted a fourth-straight month of decline, with orders in optics, precision instruments and electronics among the biggest decliners.
Bookings in January probably dropped sharply to $17.9 billion from $20.79 billion in December, when the annual decline was 33 percent.
However, the fall in January orders was curbed by recent rush orders, which offset the impact of fewer working days in the same period due to the timing of the lunar new year holiday, economists said.
"The economic situation in the United States and Europe is still bad. Unless the situation in these places improves, orders will remain weak before the fourth quarter," said Cheng Yu-cheng, an economist with the Polaris Research Institute.
Earlier this month, Taiwan's "economics ministry" said the island's export orders would be weak in the first three quarters, with the full year likely falling by 10 percent, the first decline since 2001.
Taiwan's export orders are a gauge of the strength of the global tech market and how the island's exports will fare in coming months. Earlier this week, Singapore and South Korea both reported a record decline in January exports.
Taiwan's exports, which account for more than 60 percent of the island's economic growth, slumped by a record 44 percent in January from a year earlier.
The gloomy orders will add further pressure to the island's economy after Taiwan posted Wednesday a record annual decline in GDP in the fourth quarter, sending it deeper into recession and prompting the central bank to cut its interest rate to a record low.
Industrial output in January also likely fell by a record 39 percent, its fifth-consecutive month of decline, as companies cut back on excess production and inventory due to waning exports, economists said. In December, output fell 32.35 percent.
However, the fall was likely tempered after Taiwan's government launched programs, such as free shopping vouchers, to stimulate domestic consumption.
"With several discount stores and major shopping malls indicating a jump in revenue after the government handed out NT$86 billion in shopping vouchers just a week ahead of Chinese New Year, this is likely to provide some cushion to the downside," said Tony Phoo, an economist at Standard Chartered.
Reuters
(HK Edition 02/21/2009 page2)