Taiwan's 26-month export growth streak ends in September

10/07/2022 09:18 PM
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CNA photo Oct. 7, 2022
CNA photo Oct. 7, 2022

Taipei, Oct. 7 (CNA) Taiwan's exports fell more than 5 percent from a year earlier in September, ending a 26-month streak of growing monthly exports amid weakening global demand, the Ministry of Finance (MOF) said Friday.

Data compiled by the MOF showed the country's exports fell 5.3 percent from a year earlier to US$37.53 billion in September, the second lowest level this year after February, when the Chinese Lunar New Year holiday took place, after a 2 percent year-on-year increase in August.

September exports failed to meet the MOF's earlier forecast which saw outbound sales of US$38.4 billion to US$40 billion, growing at a pace of minus 3 percent to 1 percent from a year earlier.

The ministry said the weaker-than-expected exports in September largely reflected the continued fall in demand for goods made by Taiwanese old economy exporters, while the country's semiconductor suppliers continued to enjoy solid demand for emerging applications.

In September, Taiwan's imports fell 2.4 percent from a year earlier to US$32.51 billion, with a trade surplus of US$5.02 billion, down 20.6 percent from a year earlier, according to the MOF.

In the third quarter, the country's exports rose 3.4 percent from a year earlier to US$121.11 billion and its imports increased 6.5 percent to US$108.08 billion, while the trade surplus for the three-month period fell 16.6 percent from a year earlier to US$13.03 billion, the MOF said.

In the first nine months of this year, Taiwan's outbound sales totaled US$367.76 billion, up 13.5 percent from a year earlier and imports hit US$327.06 billion, up 18.0 percent, with a trade surplus of US$40.70 billion, down 13.3 percent year-on-year, the MOF added.

Analysis

Speaking with reporters, Beatrice Tsai (蔡美娜), director-general of the MOF Department of Statistics, said September was the first month in more than two years Taiwan has reported a year-on-year decline for both exports and imports in the same month.

Tsai said high inflation, a worldwide rate hike cycle, as well as the weakening Chinese economy led to stagnant demand for consumer electronic gadgets and inventory adjustments in the global supply chain, hurting Taiwan's outbound sales in September, though high performance computing devices and automotive electronics continued to lend support to the local semiconductor industry in the month.

In addition, Tsai said as global demand showed signs of weakening, many investors turned cautious about expansion, which paved the way for a fall in equipment purchases, sending Taiwan's imports lower in September.

In the month, Taiwan's exports of electronic components, including semiconductors, rose 2.4 percent from a year earlier to US$16.99 billion, while exports of information and video/audio devices fell 4.4 percent year-on-year to US$5.17 billion, the MOF said.

The old economy industries have clearly been more severely impacted by weakening global demand with outbound sales of base metals, plastic/rubber products, chemical items and machinery falling 26.6 percent, 25.2 percent, 15.2 percent and 3.9 percent, respectively, from a year earlier to US$2.49 billion, US$1.75 billion, US$1.60 billion and US$2.12 billion in September, according to the ministry.

Bucking the downturn, exports of mineral products such as gasoline and diesel soared 33.4 percent from a year earlier to US$1.45 billion in September due to a spike in product prices for more expensive crude oil, the MOF said.

Export destinations

While China and Hong Kong remained the largest buyer of Taiwan-made goods in September, exports fell 13.3 percent from a year earlier to US$15.17 billion due to weaker demand amid China's zero tolerance COVID-19 policy. Tsai said the decline was the steepest in 42 months.

ASEAN countries came second after purchasing US$5.99 billion worth of goods from Taiwan in September, up 5.5 percent from a year earlier on the back of solid demand for Taiwan-made electronic components, the MOF said.

Exports to the U.S., European and Japanese markets in September moved lower by 2.1 percent, 5.2 percent and 0.7 percent, respectively, from a year earlier to US$5.86 billion, US$3.03 billion and US$2.58 billion in September, the MOF added.

Looking ahead, Tsai said as global inflation remains high and interest rates rise, affecting demand and resulting in ongoing inventory adjustments in the world market, it is possible Taiwan could report exports ranging from US$37.7 billion to US$38.9 billion in October, a drop of 3-6 percent from a year earlier.

Taiwan's exporters are not expected to see peak season effects in the fourth quarter, Tsai added.

(By Chang Ai and Frances Huang)

Enditem/AW

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