Taiwan May export orders improve, decline less than expected

Taiwan’s export orders for the month of May improved, though they still declined at a pace less than what the market had expected. The improvement can be largely attributed to low base effects, given that export orders are improving but a recovery is not right underway, DBS reported.

Export orders came in at -5.8 percent y/y in May, compared to -11.1 percent in April. However, market participants had expected export orders to fall by 7 percent, on an average. Looking at the past two months as a whole, export orders contracted -8.5 percent on average, similar as the -8.2 percent witnessed in the first quarter of this year, data released by the Taiwan’s Ministry of Economic Affairs showed.

Export orders in the segment of precision instruments led the improvement. Orders in this segment registered -19.3 percent in May, better than the -26.4 percent in April and also the -32 percent in 1Q. This segment has witnessed a declining business for three consecutive years, since 2013.

However, electronics sector witnessed no recovery or improvement in export orders. Export orders for electronics components declined -3.1 percent in May, better than April’s -9.8 percent, but still worse than the first quarter average of -2.6 percent. Likewise, orders for information and communication products contracted -3.5 percent in May, shallower than the -10 percent in April, but not too different compared to the -5.3 percent in the first quarter.

While major trading partners saw another month of contraction, falling orders from many trading partners softened markedly from April, with year-on-year decline from China and the US. However, contraction of orders from Japan intensified slightly to -25.3 per cent.

Exports contracted 9.6 percent in May y/y, a setback after having climbed up to a reading of -6.5 per cent the previous month, their best reading since November 2015, data showed