Taiwan April exports shrink unexpectedly, China, Europe demand sputters

TAIPEI Tue May 7, 2013 2:18pm IST

A general view shows containers stacked up at Keelung port in northern Taiwan February 20, 2012. REUTERS/Shengfa Lin

A general view shows containers stacked up at Keelung port in northern Taiwan February 20, 2012.

Credit: Reuters/Shengfa Lin

Stocks

   
Inside the Peshawar school

Inside the Peshawar school

The aftermath inside the Pakistan school where at least 132 students and nine staff members were killed by Taliban gunmen.  Pictures 

TAIPEI (Reuters) - Taiwan's exports shrank unexpectedly in April as sales to China and Europe sputtered, underscoring increasing fragility in global demand, especially for the island's high-tech products.

April exports fell 1.9 percent from a year earlier, much worse than the 1.35 percent growth forecast in a Reuters poll and compared with growth of 3.3 percent in March.

Exports to China stalled, inching up a scant 0.2 percent, versus 5.2 percent growth in March, while exports to Europe dropped 19.3 percent, a much faster contraction than the 12.3 percent decline recorded the previous month, the finance ministry said on Tuesday.

Shipments to the United States were the lone bright spot, rising 4.9 percent after contracting 1.9 percent in March.

"Exports in 2013 will be challenging," the ministry told a news briefing, adding that year-on-year export growth in the second quarter could be lower than the 2.4 percent seen in the first quarter.

Mainland China, Taiwan's biggest export market, is showing signs of losing momentum. The closely-watched official government Chinese PMIs showed slowing growth last week in both services and manufacturing sectors.

Factory-sector activity in China stumbled in April to further underline the impact of a fragile global economy, which is under pressure from the euro zone recession.

"Chip shipments have been growing for a few month, and electronics shipment are not doing bad, so the decline had to do with slowing global growth," said Frances Cheung, a senior strategist of Credit Agricole CIB in Hong Kong.

"I'm worried that exports in Q2 will be below expectations, but looking into Q3, we're still confident about the recovery in the U.S. and economic growth in China so exports should do better in that quarter," Cheung added.

Orders for Taiwan's exports in March unexpectedly shrank 6.6 percent from a year earlier, contracting for the second straight month and heralding slowing momentum for some of Asia's trade-reliant economies. Taiwan's export orders are a leading indicator of demand for the region's exports and typically lead actual exports by two to three months.

Taiwan's economy grew by a much-slower-than-expected 1.54 percent in the first quarter from a year earlier, badly undershooting a median forecast of 3 percent as export growth fell short of expectations and private consumption sputtered.

Smartphone maker HTC Corp (2498.TW) on Monday reported a 37 percent fall in April sales from a year earlier.

Asian suppliers to Apple Inc (AAPL.O) such as Hon Hai Precision Industry (2317.TW), the world's largest electronics contract maker, have also suffered as the U.S. tech giant's growth momentum slows.

(Additional reporting by Clare Jim; Editing by Jacqueline Wong & Kim Coghill)

Economic Pulse

REUTERS SHOWCASE

Hope for SpiceJet

Hope for SpiceJet

Former SpiceJet owner leading rescue plan: reports.  Full Article 

Oil Prices

Oil Prices

Oil rallies above $60, heads for 4th weekly decline on glut.  Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Reuters Exclusive

Reuters Exclusive

Google aiming to go straight into car with next Android – sources.  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage