Taiwan: Export growth picks up in September but remains weak
October 8, 2018
Merchandise exports grew 2.6% in annual terms in September, accelerating from the 1.9% expansion registered in August and significantly exceeding the predictions of analysts who had expected exports to contract 1.3%. Nevertheless, the print was much lower than the double-digit growth rates recorded at the beginning of the year, causing growth in the 12-month trailing sum of exports to fall from 10.7% in August to 8.7% in September. On the other hand, export orders in August increased 8.4% year-on-year, up from 8.0% yoy in July. Since export orders typically lead actual exports by two to three months, the July and August order data likely indicates an acceleration of export activity in the months to come.
Looking at the details of export categories, the September print was driven by a sharp rebound in exports of base metals and articles of base metals, as well as faster growth in exports of plastics and rubber and articles thereof. These increases more than compensated for contractions in exports of parts of electronic products (which represents a third of Taiwan’s total exports); information, communication and audio-video products; and machinery. In terms of regional segmentation, exports to mainland China and Hong Kong, Japan and Europe all decelerated. On the other hand, the contraction in exports to ASEAN countries was markedly softer than in August, while exports to the USA accelerated sharply.
Import growth meanwhile jumped from 7.9% year-on-year in August to 13.9% in September. This was largely due to soaring imports of base metals and articles thereof, and higher imports of petroleum. Growth of the 12-month trailing sum of imports moderated from 11.2% in August to 10.6% in September.
Due to the surge in imports, the trade surplus reached USD 4.3 billion in September, down from USD 4.5 billion in August. Meanwhile, the 12-month trailing trade surplus fell to USD 54.0 billion in September, from USD 56.3 billion in the 12 months up to August.
Taiwan Trade Balance Forecast
Our panelists forecast that exports will expand 7.7% in 2018 and imports will rise 7.7%, bringing the trade surplus to USD 62.3 billion. In 2019, our panel expects exports will expand 4.7%, while imports will rise 5.0%, with the trade surplus hitting USD 64.6 billion.
Author: Joffrey Simonet, Economist