Orders, an indication of shipments in the next one to three months, climbed 4.38 percent from a year earlier, after a 2.72 percent gain in September, the Ministry of Economic Affairs said in Taipei today. The median of 10 estimates in a Bloomberg News survey was for a 3.5 percent advance.
The acceleration in overseas shipments orders may be short- lived as the European debt crisis and elevated U.S. unemployment damp demand for goods made in Asia, with Singapore lowering its export-growth forecast for 2011 today and South Korean shipments rising at the slowest pace in two years in October. Asian policy makers have lowered borrowing costs or implemented fiscal measures to bolster domestic spending as global growth weakens.
“The trade environment in the near term will continue to be very challenging,” Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, said before the release. The European debt crisis will affect orders from the region and the Taiwan monetary authority will probably keep borrowing costs unchanged at its quarterly meeting in December, he said.
The Taiex stock index fell 2.6 percent today. The Taiwan dollar was little changed at NT$30.260 against its U.S. counterpart at the 4 p.m. close, according to Taipei Forex Inc.
Taiwan’s current-account surplus widened to $10.21 billion in the three months through September, a separate report showed today, compared with a revised $8.36 billion excess in the second quarter.
The island’s economy contracted 0.28 percent last quarter from the previous three months, shrinking for the first time since 2009. Taiwan is likely headed for a technical recession, defined as two consecutive quarters of contraction, according to predictions by Capital Economics Ltd., BNP Paribas SA and Credit Suisse Group AG.
The government cut its forecast for 2011 growth for a second time to 4.56 percent last month, and said the expansion will slow to 4.38 percent in 2012. The central bank in September refrained from raising interest rates, ending five straight quarters of increases as Asian policy makers seek to protect their economies.
Overseas shipments account for about two-thirds of Taiwan’s $430 billion economy, with China its largest trading partner.
The value of export orders advanced to $37.21 billion last month from $36.96 billion in September, today’s report showed.
Orders from Japan fell 14.94 percent in October from a year earlier, after declining 13.19 percent in September. Demand from China and Hong Kong combined increased 8.52 percent, after rising 5.67 percent the previous month. Purchases from the U.S. climbed 14.12 percent, compared with a 9.33 percent gain in September.
Orders for electronics rose 1.03 percent in October from a year earlier, following a 3.2 percent drop the previous month. Demand for information technology and communications products climbed 7.17 percent, after rising 2.89 percent in September.
To contact the reporter on this story: Chinmei Sung in Taipei at firstname.lastname@example.org.