Taiwan’s Jan.-Feb. Exports Edge Up 0.4% YoY

Taiwan’s overall exports for the first two months of this year totaled US$45.6 billion, edging up 0.4% year-on-year (YoY), mostly driven by electronics and machinery shipments, according to the latest statistics compiled by Ministry of Finance (MOF).

MOF’s statistics show that exports and imports in February alone reached US$21.29 billion and US$19.72 billion, respectively, up 7.9% YoY and 4.9%, hence leading to a trade surplus of US$1.57 billion, US$640 million more than last February. For the first two months, Taiwan’s cumulative trade surplus totaled US$4.54 billion, compared to US$3.1 billion during the same period of last year.

Electronics and machinery shipments drove Taiwan’s exports early this year. Apparently immune to seasonal factors, electronics exports in January-February amounted to US$13.83 billion, soaring 12.7% YoY, according to MOF officials. The officials predict optimistically that the sector’s exports in March, compared to last March, will surely keep trending upward, by an estimated US$500 million, given that this year’s March has one more working day than last year’s.

Meanwhile, Taiwan’s January-February exports of machinery totaled US$2.854 billion, up 7.5% YoY, with those of machine tools and non-machine-tool machines showing a 1.3% drop and 9.5% growth, respectively. Worth mentioning is that the industry’s exports in February totaled US$1.35 billion, surging 24.7% YoY and reversing a persistent 16-month downturn.

Compared to robust export growths by the sectors mentioned above, the display panel and ICT (information and communication) sectors, however, finished the first two months of this year with disappointing results.

MOF indicated that overall exports of optoelectronics for January-February dived 22.7% YoY to only US$2.64 billion, with those of display panels plummeting 27.7% as well. Notable is that exports by the sector have dropped for seven months in a row and to a nadir in February since August 2009.

MOF officials explained that the sector’s downturn was caused partly by greatly declining demand for display panels in China, given that such products and related parts and components make up 70% of the sector’s overall exports, and partly by oversupply that has also weighed on their Korean counterparts for the moment.

Coincidentally, Taiwan’s ICT product exports, which have spiraled downward for five consecutive months till February, totaled US$1.64 billion for January-February, down 18.6% YoY, with those of handsets, and parts for handsets and telephones falling drastically by 28.5% and 30.5%, respectively, according to MOF’s statistics. The sector’s lackluster performance was due largely to a 30.5% drop in handsets exported to the U.S., an inevitable result of Taiwan’s smartphone vendors, starting with HTC Corp., having generally stumbled in the global competition against Samsung, Apple and emerging rivals from China.

So far, cumulative exports during January-February are still US$28 billion shy of the government’s goal for the first quarter of this year, which represents a 1.32% increase compared to a year ago. MOF officials admit that the government will have to “work very hard” to attain the goal, and warned that a couple of factors, including growing rivalry from Chinese competitors, increasingly challenging global market, and tapering of the U.S.’s QE3, have cast shadow on Taiwan’s exports.

Another sign of Taiwan’s exports likely to lose growth momentum in the short term is declining import of capital equipment, which reached US$5.25 billion for January-February, down US$250 million from a year earlier, while imported machinery and semiconductor production equipment showed a 4.4% and 2.7% decline, respectively, in value. But, MOF officials don't attribute the drop to local enterprises’ sluggish willingness to investment, but to a high base a year ago. (SC)