Taiwan export orders fall for 7th month, weak demand from Japan, China

Taiwan's export orders contracted for a seventh consecutive month in October, with orders to near neighbours China and Japan sharply down on year ago levels. Orders fell 5.3 percent year on year in October, better than the 5.82 percent slide predicted in a Reuters poll. Orders declined 4.5 percent in September.
"Demand for iPhone 6S components contributed to export orders for a second month in October, sending the value of information and telecommunication orders to a record level," said Kevin Wang, an analyst of Taishin Securities Investment Advisory in Taipei.
Orders from China in October were down 10.6 percent from a year earlier, and 24 percent down from Japan. Orders from Europe were down 2.1 percent, but orders from the United States were 5.6 percent up. Among major sectors, orders for electronics goods fell 4 percent. Taiwan's economics ministry said the increase in information communication orders, which jumped 11 percent year on year, was bolstered by a major smartphone brand, without specifying which one. The latest orders number will give the trade-reliant economy some encouragement going into the final quarter, when the year-end shopping would usually pick up.
Taiwan's export orders are seen as a leading indicator of demand for Asia's exports and for hi-tech gadgets, as they typically lead actual exports by two to three months. Many Taiwanese tech companies supply components that make up Apple gadgets, including contract electronics maker Hon Hai Precision Industry Co and camera lenses module maker Largan Precision Co.
Taiwan Semiconductor Manufacturing Co, the world's largest contract chip maker and an Apple supplier, told Reuters on Thursday it aims to boost capital expenditure next year. "We won't be conservative," the company's co-chief executive, C.C. Wei, said. Looking ahead, the economics ministry warned the outlook for the global economy was unclear.
"There are still a lot of uncertainties. The downside risks (for the global economy) could still increase," said Yang Kuei-hsien, deputy director of statistics department. Taiwan still faces the prospect that its economy contracted in the third quarter. Earlier this month, Taiwan reported actual exports shrank 11 percent in October from a year earlier. It was the ninth month running to show a fall.
Separately, Taiwan's third-quarter current account surplus rose to $19.67 billion from $15.16 billion in the year-ago period, the central bank said. The balance of payment surplus also jumped to $5.69 billion from $4.18 billion during the same period, the central bank added, with exports down 13.8 pct and imports falling 21.4 percent.