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UPDATE 1-Taiwan's solid April export orders boost chances for firmer GDP outlook
May 22, 2017 / 9:35 AM / 7 months ago

UPDATE 1-Taiwan's solid April export orders boost chances for firmer GDP outlook

(Adds details, comments)

* April export orders +7.4 pct y/y vs Reuters poll +14.05 pct

* Exports orders from China +13.8 pct y/y, from U.S. +6.0 pct

* Economists see govt raising 2017 full-year GDP, export outlook

By Emily Chan and J.R. Wu

TAIPEI, May 22 (Reuters) - Taiwan’s export orders grew less than expected in April, but the ninth straight month of expansion points to continuing global tech demand that will likely trigger an upward revision in the government’s economic growth estimate for this year.

The island posted buoyant exports in the first quarter underpinned by a global economic recovery and strong semiconductor demand, giving it room to raise its full-year 2017 GDP target from 1.92 percent - a three-year high, analysts say.

“The information and communication orders’ growth wasn’t bad...we expect this year’s economic growth to be able to reach 2 percent,” said Kuoan Hsu, an analyst at the investment consulting arm of Capital Securities group in Taipei.

Export orders, primarily for Taiwan’s signature technology gadgets, rose 7.4 percent last month from a year earlier, data from the Ministry of Economic Affairs showed on Monday. That was around half the 14.05 percent median growth forecast of a Reuters poll and compared with a 12.3 percent gain in March.

The second quarter may slow, being traditionally an offpeak season for the technology sector, economists said. But business is expected to pick up nearer the third quarter as manufacturers rush to meet their clients’ new product launch schedules.

“I think we will probably see some hiccups in the second quarter...but that said, I don’t expect that the overall trade outlook will turn sour, and especially for Taiwan electronics. It will be pretty robust this year,” said Raymond Yeung, senior economist at ANZ based in Hong Kong.

April orders from China and Europe were in the double-digits, while those from the United States and Japan were slower but still robust.

Export orders from China, the island’s largest trading partner, grew 13.8 percent in April compared with a 19.9 percent gain in March. Orders from Europe surged 19 percent from near 4 percent previously.

From the United States, orders rose 6 percent versus 15.4 percent in March, and from Japan they grew 7.6 percent, also slowing from its pace in March.

Taiwan’s export orders are a leading indicator of demand for Asia’s exports and for hi-tech gadgets, and typically lead actual exports by two to three months.

Orders for optical equipment, which include large-size display panels, were up 22.3 percent in April from a year earlier, while information and communciation orders rose 13.1 percent. Orders for electronics products climbed 4.1 percent.

The growth in orders follows strong manufacturing activity and imports data for April which indicated strength in future exports, a driver of more than half of Taiwan’s economic growth.

In February, the government had forecast exports would grow 8.5 percent. Both GDP and exports for 2017 are expected to be revised upwards on Friday when the government issues its next economic report. (Additional reporting by Jess Macy Yu and Liang-sa Loh; Editing by Jacqueline Wong)

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