TAIPEI 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)