Nov. 23 (Bloomberg) -- Taiwan’s export orders climbed in October for the first time in 13 months as stronger demand for electronics goods spurs the island’s economic recovery.

Orders, an indication of shipments in the next one to three months, rose 4.41 percent from a year earlier, after a 3 percent drop in September, the Ministry of Economic Affairs said in Taipei today. The median estimate of 10 economists surveyed by Bloomberg News was for a 3.95 percent gain.

The island’s jobless rate fell for the first time in more than a year last month as improving exports prompted companies including Taiwan Semiconductor Manufacturing Co. to hire more people and forecast better sales. Taiwan is dependent on a rebound in overseas shipments to sustain its recovery from a yearlong recession.

“In the long term, Asian demand will still be the main export growth driver as there are doubts in the market about the sustainability of the U.S. economic recovery,” said Ma Tieying, an economist at DBS Group Holdings Ltd. in Singapore.

The world’s largest economy expanded 3.5 percent in the third quarter after a yearlong contraction. World Bank President Robert Zoellick said Nov. 19 the international community can’t rely on U.S. private consumption to support an economic recovery.

A revival in exports is needed to sustain Asia’s emergence from the world recession after the region’s governments pumped more than $950 billion into their economies and cut interest rates to boost growth.

Export Markets

China’s economy, Taiwan’s biggest export market, expanded 8.9 percent last quarter from a year earlier, the fastest pace in a year, spurring sales for Taiwan electronics makers including HTC Corp., the world’s largest producer of handsets using Microsoft Corp.’s Windows operating system. Japan’s exports fell at the slowest pace in 10 months in September.

Taiwan’s economy probably contracted 2.6 percent in the third quarter, after declining 7.54 percent in the preceding three months, according to the median estimate of 14 economists surveyed by Bloomberg. Exports account for more than two-thirds of the island’s economy. The government is due to report third- quarter gross domestic product on Nov. 26.

Taiwan’s industrial production rose 6.56 percent in October from a year earlier, after gaining a revised 1.66 percent in September, the government said today.

The seasonally adjusted jobless rate fell to 6.04 percent last month from a record 6.09 percent in September, the statistics bureau said today in Taipei.

‘Turn Positive’

“Export orders are likely to turn positive in the fourth quarter,” Huang Ji-shih, the economy ministry’s chief statistician, said in a briefing in Taipei today. The value of orders is likely to be between $310 billion and $320 billion this year, he said.

Industrial production probably shrank about 10 percent in 2009, Huang said.

Taiwan’s central bank Governor Perng Fai-nan said on Sept. 24 he plans to maintain low borrowing costs because of the slow pace of the economic recovery. The central bank left the benchmark rate unchanged in September after seven cuts since September 2008 that reduced it to a record-low 1.25 percent.

Today’s figures were released after the close of trading on the Taiwan Stock Exchange. The Taiex index added 0.1 percent to close at 7,687.15. It has gained 67 percent this year. The Taiwan dollar climbed 0.3 percent to NT$32.267 per U.S. dollar as of 4 p.m. local time, according to Taipei Forex Inc.

Industry Barometer

Taiwan Semiconductor, the world’s largest custom-chipmaker, forecast fourth-quarter sales will increase as much as 43 percent from a year earlier as demand increased.

The company, a barometer for the industry because it makes chips for everything from mobile phones to medical equipment, raised its spending budget for factories and equipment this year to $2.7 billion from a July 30 estimate of $2.3 billion.

Quanta Computer Inc., the world’s second-largest maker of notebooks by shipments, posted third-quarter profit that beat analysts’ estimates after the company sold more computers than it forecast. Quanta, whose clients include Apple Inc. and Hewlett-Packard Co., expects shipments in the current period may climb as customers continue to place orders.

The value of export orders rose to $31.75 billion last month, compared with $30.84 billion in September, today’s report showed.

Export orders to China and Hong Kong combined rose 19.6 percent last month, compared with a gain of 9.44 percent in September. Orders from the U.S. rose 0.67 percent from a year earlier, compared with a 10.6 percent decline in September.

Orders for electronics rose 4.07 percent last month, compared with a decline of 0.25 percent in September, today’s report showed. Demand for information technology and communications products rose 5.63 percent in October, after rising 2.41 percent the previous month.

To contact the reporter on this story: Janet Ong in Taipei at jong3@bloomberg.net.

Last Updated: November 23, 2009 05:05 EST