Taiwan's soft IP and domestic sales to end Q1 on a downbeat note

Taiwan's industrial production (IP) growth is expected to moderate to 4.7% yoy in March from 5.6% in January/February, shows Societe Generale estimates. The alarming collapse of exports in March, which cannot be fully explained by the commodity price plunge, points to weakening external demand. 

Moreover, the HSBC manufacturing PMI declined to 51 in March from 52.1, as both output and new orders decelerated. At the same time, commercial sales are expected to have rebounded, albeit modestly to 0.8% yoy in March after 0.1% in January and February combined. This can be mainly attributed to the rebound in wholesale and slightly improved wholesale price inflation after the Lunar New Year holidays. 

Meanwhile, retail sales and services probably normalised lower after the holiday period. All in all, these two reports are likely to point to softer growth momentum in Q1.