TAIPEI: Taiwan’s August exports expanded for a fourth straight month as shipments to China, its largest market, rebounded and raised optimism of stronger year-end sales for its tech companies.
The island is home to some of the world’s largest chipmakers who are betting on a recovery in the United States to counter a slowdown in China, where a sizeable amount of its exports finally end up in smartphones and other consumer gadgets.
Exports in August rose 3.6 per cent from a year earlier, data from the ministry of finance showed, slightly slower than 3.9 per cent growth forecast in a Reuters poll. That compared with a rise of 1.6 per cent in July, 8.6 per cent in June and 0.9 per cent in May.
“China’s long October 1 holiday and the year-end hot season from the US and Europe will boost Taiwan export momentum,” the ministry said a statement.
Local tech firms are rolling out new generation smartphones with thinner and lighter bodies, and capturing orders for the production of smart watches.
“We are quite optimistic about the second half of the year as we see demand is accelerating from Japan, Europe, US and China. However the growth rate would be dragged as it was a high base last year,” said analyst Andrew Tsai of KGI Securities in Taipei.
“Bad sales of HTC are pulling down some demand. Exports from Apple’s supply chain are obviously increasing, especially since China Mobile will also be selling iPhone this time. This will give support to the bottom line.”
A run of upbeat data from the region’s two biggest economies suggests a protracted slowdown in China’s economy may be bottoming out while Japan’s economy is on more solid footing.
But intensifying competition and saturated markets are hitting revenue of some Taiwanese tech companies. The government has cut the island’s growth outlook for the year.
A possible sign of slippage ahead is a second month of falling imports.
Imports in August slipped 1.2 per cent from a year earlier, compared with growth of 4.99 per cent forecast by economists. The decline points to pressure on exports, as part of imports are re-exported.
Exports to China in August gained 2.9 per cent from July’s contraction of 0.9 per cent. Shipments to Europe grew 4.0 per cent from a rise of 6 per cent in July, while those to Japan edged down 0.1 per cent versus 1.2 per cent growth previously.
Shipments to the United States in August grew 0.9 per cent versus a gain of 1.4 per cent in July, the data showed.
Taiwan’s export outlook has improved with orders rebounding in July after five successive months of contraction. Its manufacturing PMI in August also rose to 50 after contracting for three months, suggesting that activity was stabilising as well.