Taiwan Sep export orders likely to decline, expected to recover in near term

Export orders in Taiwan are likely to have risen during the month of September mainly due to the high base effects. However, export orders are expected to remain on a recovery path in the near term, largely aided by rising demand for electronic goods.

Taiwan’s export orders are expected to decline -2.0 percent y/y, down from 8.3 percent in the previous month. However, the sales outlook for the newly launched iPhone 7 series may remain better than market expectations, since its major competition from Samsung seems dull on the safety issues concerning Galaxy Note 7, DBS reported.

Taiwan’s TSMC, one of the major dealers in smartphone components for Apple, reported strong earnings results for the third quarter last week and has upgraded the 2016 revenue forecast to 11-12 percent, compared to 5-10 percent previously.

In addition, actual exports unexpectedly fell -1.8 percent y/y in September, though partly due to the disruption of typhoons. However, industrial production for September will be the important data to watch next week, followed by the release of 3Q GDP at the end of this month.

"Our initial assessment is that GDP growth may rise to about 2 percent in 3Q from 0.7 percent in 2Q, roughly matching the official estimate of 1.99 percent," DBS commented in its latest research note.