Taiwan March export orders fall again, but silver lining seen

Taiwan's export orders fell for the 12th month in a row in March but growth in electronics and a slower pace of decline in key markets provided a ray of hope for the island's manufacturers. March export orders fell 4.7 percent from a year earlier, its narrowest decline in six months and better than the 8.7 percent drop forecast in a Reuters poll.
The slump in orders from key markets China and the United States narrowed in March, although they steepened from Europe and Japan, data from the economics ministry showed on Wednesday. Orders for electronics goods in March rose 1.6 percent from the same month a year earlier, the first growth since March last year, an encouraging sign for Taiwan's many large tech companies who play a key role in the global supply chain.
The ministry said companies surveyed for their outlook for April mostly said the value of orders this month would likely be lower compared with $36.6 billion racked up in March. Economists said still-weak economic activity meant the authorities will keep monetary conditions loose to support growth.
"Until demand recovers in a big way, we expect the central bank to continue to cut rates at their second quarter meeting," said Andrew Tsai, economist with KGI Securities Investment Advisory in Taipei. The government will issue its preliminary reading for gross domestic product in the first quarter next week; in mid-February it estimated a 0.64 percent year-on-year contraction. The island economy has seen three successive rate cuts since late September, as quarterly GDP has contracted year-on-year since the third quarter of last year.
Taiwan's export orders, which are dominated by orders for components used in smartphones, consumer electronics and computing gadgets, are an indication of the strength of Asian exports and of global demand for technology. While recent export data from China also showed greenshoots in recovery in Taiwan's largest trading partner, tech bellwether Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, said last week it remained cautious about where global tech demand was headed.
Orders from China in March fell 7.5 percent from a year earlier, better than the 12.1 percent slump in February, while the contraction in orders from the United States halved to 2.2 percent compared with February's 4.5 percent. Orders from Japan fell a larger 26 percent and the ministry said the massive quake in Japan this month is an uncertainty ahead for orders if it disrupts the supply chain. All other orders product categories, except electronic goods, fell in March, including orders for information communications goods, which were down 2.8 percent.