Taiwan: Export growth slows in April as maturing tech cycle softens demand for semiconductors
May 7, 2018
Merchandise exports grew 10.0% year-on-year in April, a significant slowdown from the 16.7% growth recorded in March. The headline figure also came under the 11.4% reading expected by market analysts.
The moderation was due to a broad-based deterioration in all major export categories. The sharpest decelerations were observed in exports of machinery, parts of electronic products, and base metals, in that order, while exports of plastics and rubbers remained robust, only slowing marginally. Parts of electronic products, which represent about a third of total exports, had the most impact on the slowdown in exports observed at the beginning of the second quarter. This was in good part due to a downturn in the tech cycle, which is seen having peaked in recent months amid tepid demand for products such as Apple’s new iPhone X.
The slowdown in export growth mostly reflected lower appetite from mainland China and Hong Kong, as annual growth in exports towards this area in April more than halved compared to in March. On the other hand, demand from Europe and the U.S. was steady, while shipments to Japan accelerated. The 12-month trailing sum of exports expanded 12.2% in April, ticking up marginally from the 12.1% logged in March.
Import growth also slowed notably in April to just 4.9% (March: +10.4% yoy). The softer expansion recorded in April came on the back of a sharper fall in machinery imports, which declined for the third consecutive month, combined with a drop in imports of mineral products, notably petroleum. On the other hand, imports of parts of electronic products accelerated, underlining the fundamental robustness of an industry in which lower smartphone demand is increasingly being compensated for by demand for car computers, smart appliances and wearables. Growth in the 12-month trailing sum of imports decreased to 8.9% in April, from 10.3% in the 12 months leading up to March.
The trade surplus decreased to USD 4.2 billion in April, down from USD 6.0 billion in March, while the 12-month trailing trade surplus rose to USD 60.1 billion, from USD 58.8 billion in the 12 months up to March.
Author: Joffrey Simonet, Economist