Taiwan: Export growth accelerates in May on higher Asian and U.S. demand
June 8, 2018
Merchandise exports grew 14.2% year-on-year in May, picking up pace from the 10.0% growth recorded in April and beating market analysts’ expectations of a 12.0% expansion. The pick-up was broad-based, with all major export categories recording faster growth than in the previous month. The sharpest accelerations were recorded for exports of machinery, while exports of information, communication and audio-video products recorded modest growth in May. Meanwhile, exports of parts of electronic products—representing around a third of total Taiwanese shipments—accelerated strongly again in May. Indeed, although demand for computers and smartphones appears to be in a cyclical trough, it is being compensated for by high growth in newer applications such as automobile electronics and artificial intelligence.
Furthermore, the performance of the export-oriented sector in May was reinforced by stronger growth of export orders—which typically lead exports by a few months—recorded in April. Again, electronics and machinery orders performed especially well, while orders for information and communication products, which comprise smartphones and computers, fell marginally, seemingly confirming cyclical demand weakness in the sector.
Foreign demand was particularly strong in Asia, which accounts for over 60% of exports. Demand from mainland China and Hong Kong recovered notably, while exports to Japan and the ASEAN area picked up noticeably. Finally, demand from the U.S. increased sharply following months of relatively muted growth. The 12-month trailing sum of exports expanded 12.7% in May, ticking up from the 12.2% figure logged in April.
Meanwhile, import growth also accelerated markedly in May, to 12.0% (April: +4.9% year-on-year), largely due to a surge in imports of mineral fuels, particularly petroleum, and a rebound in imports of machinery. Overall, import growth accelerated across most major categories, save for parts of electronic products, which slowed markedly. Growth in the 12-month trailing sum of imports inched up to 9.0% in May, from 8.8% in the 12 months leading up to April.
The trade surplus increased to USD 4.4 billion in May, up from USD 4.2 billion in April, while the 12-month trailing trade surplus rose to USD 61.3 billion, from USD 60.3 billion in the 12 months up to April.
Author: Joffrey Simonet, Economist