Taiwan Export Orders Rose for 10th Month in July, Weathering Global Risks
Taiwan’s export orders increased for a 10th straight month in July in a sign demand for the island’s microchips and displays is weathering global economic risks.
Orders, an indication of shipments in the next one to three months, rose 18.23 percent from a year ago, after jumping 22.48 percent in June, the Ministry of Economic Affairs said in Taipei today. The median estimate of 13 economists in a Bloomberg News survey was for a 20.5 percent gain.
Exports helped propel Taiwan to 12.5 percent economic growth last quarter, boosting earnings at companies including Hsinchu-based Taiwan Semiconductor Manufacturing Co., the world’s largest custom manufacturer of chips. The recovery has added to the case for higher borrowing costs even as slowdowns in the U.S., Japan and China cloud the outlook for trade gains.
“All components of the economy are expanding, but the external sectors are driving growth,” Tine Olsen, an economist at Moody’s economy.com in Sydney, said ahead of today’s report. The recent slowdown in exports and industrial production indicates the economy is “cooling to sustainable growth levels” rather than stalling, she said.
Another report showed the current-account surplus widened to $10.56 billion in the three months through June, from $10.3 billion in the prior period. That compared with the median estimate of $11 billion in a Bloomberg News survey. The island’s exports rose for a ninth month in July, advancing 38.5 percent from a year earlier, according to data earlier this month.
Economic Growth
Taiwan’s second-quarter economic expansion beat the 10.15 percent median estimate in a Bloomberg News survey, according to figures released yesterday by the statistics office. The performance affirmed non-Japan Asia’s resilience to global risks, after Malaysia reported growth of 8.9 percent this week and Hong Kong’s GDP exceeded forecasts.
Today’s export orders data were released after the close of trading on the stock exchange. The Taiex share index ended the day little changed at 7,927.31. The Taiwan dollar was also little changed at NT$31.935 against its U.S. counterpart at the 4 p.m. close, according to Taipei Forex Inc.
The island’s exports rose for a ninth month in July, advancing 38.5 percent from a year earlier. Shipments will gain 33.2 percent this year, up from an earlier forecast of 24.5 percent, the statistics bureau said yesterday.
Taiwan Semiconductor, the island’s biggest firm by market value, last month posted record profit of NT$40.3 billion ($1.26 billion) for the second quarter. It raised its equipment budget to $5.9 billion this year after demand for phone components increased.
Record Orders
The value of export orders dropped to $33.83 billion last month from $34.22 billion in June, today’s data showed. Orders should rise as manufacturers prepare for the Christmas shopping season, said Huang Ji-Shih, head of the economic ministry’s statistics division. They may reach to a record $400 billion this year, he said last month.
Orders for electronics rose 20.6 percent in July, after a 26.91 percent gain in June. Demand for information technology and communications products climbed 17.54 percent, after increasing 26.23 percent a month earlier.
Export orders to China and Hong Kong combined increased 10.84 percent in July, after a 15.54 percent gain in June. Orders from the U.S. climbed 20.29 percent in July from a year earlier, after a 17.44 percent rise in the previous month.
Taiwan’s central bank unexpectedly raised the benchmark rate by 0.125 percentage point in June from a record-low 1.25 percent. Rising consumer and home prices may prompt policy makers to boost borrowing costs again next month, echoing a regional focus on price pressures for central banks from South Korea to Thailand, India and Australia.
To contact the reporter on this story: Chinmei Sung in Taipei at csung4@bloomberg.net.
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