(Bloomberg) — Taiwan’s export orders unexpectedly contracted in July as demand from Chinese customers plunged, and officials are now warning of further declines to come.
(Bloomberg) — Taiwan’s export orders unexpectedly contracted in July as demand from Chinese customers plunged, and officials are now warning of further declines to come.
Orders slumped 1.9% in July compared to the same month last year, according to a Monday statement from Taiwan’s Ministry of Economic Affairs. That was worse than even the most bearish forecast in a Bloomberg survey of economists. The median estimate was for a 6.2% increase.
A 22.6% decline in orders from China and Hong Kong — which, combined, are the second-largest source of demand after the US — was the main driver of the surprise fall, ministry data show. A 6.9% increase in orders from the US was insufficient to offset the difference.
Orders declined across major product categories, with the exception of electronic products, which includes semiconductors.
The outlook signals the likely end of close to two years of strong expansion in overseas orders. Export orders picked up in May and June after another shock fall in April, but the ministry said Monday that it expects orders to fall again in August between 0.9% and 3.7%.
The Chinese economy is showing multiple warning signs, with cooling demand slipping over to other economies as well. South Korea’s early exports barely rose in August, with data showing Monday that total exports advanced 3.9% but shipments to China dropped 11.2%.
Covid cases in China reached a three-month high last week, suggesting more lockdowns are likely while weak economic data signaled a slump in domestic spending.
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