Taiwan: The rise and fall in trade orders

The rise and fall in trade orders

The export orders for Taiwan contracted for ninth months straight in July, even though more slowly than expected. The demand for new electronic products might be signaled by this as the apex of the year end season of gadgets is approaching.

In comparison with June, the data from Tuesday’s record showed a placid contraction in orders that were from China and Europe. But amid increase in the trade war of U.S. with China, the demand by U.S for the products from Taiwan contracted, after being increased the previous month.

As was seen in the data provided by the Ministry of Economic Affairs of Taiwan, the orders dropped by 3.0%, in July, to $40.53 billion, from just a year earlier. This stat was better than a forecast of a decline of 5.9% in Reuter’s poll and the drop in June of 4.5%.

The expectation of the ministry is for the orders to decline, in August, 2.7-5.0% on year, but is hopeful for future.

The ministry also added that the export orders for electronics such as laptops and have been weak amid the trade war, however Taiwan has had a milder contraction because of the demand for the new electronic products leading the year-end, at which time smartphone vendors are ready to launch products.

The ministry, keeping in view the increasing demand for (5G) technology, stated that the export orders could moderately stabilize in the second half, as the peak season for electronics is approaching. However, other comments were not that optimistic and hinted that the trade war will keep on creating uncertainty regarding Taiwan’s growth.

The economist from the Masterlink Securities Investment Advisory, Johnny Ching, said that they expect continuous contraction in orders till the year ends, but fortunately the situation would not get worse.

He believes that orders could return the growth back, at the earliest possible, in the first quarter.

The hi-tech factories of Taiwan are huge suppliers for the global tech heavyweights for instance Qualcomm and Apple Inc, and the ongoing drop in orders proposes that the global electronics could stay soft for some time.