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Weakness in export orders expected to continue into Q1

2018/12/15 21:18:18

Taipei, Dec. 15 (CNA) With the ongoing trade dispute between the United States and China still underway, export orders received by Taiwanese firms are expected to continue weakening into the first quarter of next year, an economist said Saturday.

In addition, a fall in raw material prices and lower-than-expected global demand for tech devices mean that Taiwan, an export-oriented economy, is expected to feel the pinch and report disappointing export orders, said Gordon Sun (孫明德), director of the Economic Forecasting Center under the Taiwan Institute of Economic Research (TIER).

The Ministry of Economic Affairs (MOEA) is scheduled to report the country's export orders for November on Dec. 20 after a monthly record high of US$48.99 billion reported for October, up 5.1 percent from a year earlier, the fourth straight month of increase.

The MOEA said the global business sector has become more cautious, prompting many foreign buyers to put their purchases on hold, so it has forecast that Taiwan's export orders for November will range between US$48 billion and US$49 billion, representing a range of between a 0.6 percent year-on-year increase to a fall of 1.4 percent.

While the U.S. and China agreed at the G-20 summit that ended Dec. 1 to enter negotiations to resolve their trade dispute in 90 days, Sun said the business sector remained dominated by caution, which has hurt global demand for machinery needed for production expansion by manufacturers.

Sun said a fall in raw material prices is expected to drag down orders received by Taiwanese petrochemical, rubber/plastics and metal exporters. Even worse, due to a global supply glut and weakening demand, international crude oil prices could move lower next year, pushing down raw material prices further.

Moreover, Sun said, lower-than-expected demand for the latest iPhones, which were unveiled in September, has hurt market confidence in tech device shipments in the near future, while such pessimism could affect sales of other high-end tech models, which will affect orders placed with Taiwanese suppliers.

(By Liao Yu-yang and Frances Huang)