UPDATE 1-Taiwan’s June export orders fall as trade war casts a shadow

* June orders -0.1 pct y/y vs +5.90 pct Reuters poll forecast

* Orders from U.S. -4.3 pct y/y; China +5.8 pct

* Ministry predicts July orders +0.7-+3.3 percent y/y

TAIPEI, July 20 (Reuters) – Taiwan’s export orders in June shrank compared with a year earlier, contrary to expectations and raising a question of whether global trade protectionism is already hurting the trade-dependent economy.

Orders for fell 0.1 percent to $40.31 billion from the same period a year earlier, data from the Ministry of Economic Affairs showed on Friday.

The decline – a big reversal from May’s 11.7 percent rise – was the first since February, and that drop was related to the timing of Lunar New Year holidays this year rather than trade disputes like between the United States and China.

Prior to February, the last time that export orders shrank was in July 2016.

A Reuters poll had forecast an increase of 5.9 percent in June orders, and none of the analysts polled had predicted a contraction.

When the government announced May export orders, it projected that June would see a 2.8-5.3 percent rise.

Taiwan’s export orders are a leading indicator of demand for Asia’s hi-tech gadgets and other shipments, and typically lead actual exports by two to three months.

Johnny Jiang, an analyst with Masterlink Securities Corp, said he believes the June shortage reflect a high-base effect from a year earlier, when Taiwan benefited from the iPhone inventory build-up.

“It’s expected that the negative turn in June is only a one-month effect, even though the second half still faces a high base period,” Jiang said. “We expect export orders will still maintain single-digit growth.”

But another analyst said Taiwan’s economic outlook is now clouded.

“Under the shadow of the U.S.-China trade war, it will be difficult for Taiwan’s economic growth to be strong,” she said.

Orders from the United States, where Apple Inc is a major customer for major Taiwanese technology component makers, fell 4.3 percent in June from a year earlier.

Orders from China, the island’s biggest trading partner, increased 5.8 percent. Those from the European Union and Japan fell 0.5 percent and 2.3 percent, respectively.

Export orders for communications products fell 7.6 percent from a year earlier.

The ministry said it expects July’s export orders to grow between 0.7 and 3.3 percent from a year earlier. (Reporting by Jeanny Kao; Additional reporting by Roger Tung and Emily Chan; Writing by Jess Macy Yu; Editing by Richard Borsuk;)



Learn More about trading signals

What do you think?

0 points
Upvote Downvote

Total votes: 0

Upvotes: 0

Upvotes percentage: 0.000000%

Downvotes: 0

Downvotes percentage: 0.000000%

Japanese stocks slip in choppy trade as yuan swings knock sentiment

Vans shoe maker VF Corp’s quarterly results top estimates