Taiwan: Export growth weakens in June
July 9, 2018
Merchandise exports grew 9.4% over the previous year in June, slowing from the 14.2% expansion recorded in May and below market expectations of an 11.4% increase. The 12-month trailing sum of exports expanded 12.4% in June, edging down from the 12.7% figure registered in May.
Results were mixed across major export categories. Exports of parts of electronic products—representing around a third of total Taiwanese shipments—contracted in June. As one of the largest suppliers of electronic components to mainland China, Taiwan is particularly vulnerable to a potential slowdown in demand for Chinese smart devices caused by escalating trade protectionism between the U.S. and China. Meanwhile, information, communication and audio-video products export growth moderated. Accelerations were recorded in machinery exports and base metals exports, indicating strengthening demand for non-tech goods.
Looking at the breakdown of exports to key trading partners in June confirms demand slowed in Asia, which accounts for over 60% of exports, compared to levels in May. Demand from mainland China and Hong Kong as well as the ASEAN area slowed, although exports to Japan gained momentum. Meanwhile, demand from the U.S. fell sharply.
Import growth accelerated in June to 15.4% year-on-year from 12.0% in May, due to a surge in imports of mineral fuels, particularly petroleum. Imports of electronic products also picked up pace in June. Growth in the 12-month trailing sum of imports jumped to 9.9% in June from 9.0% in the 12 months leading up May.
The trade surplus rose to USD 5.2 billion in June, up from USD 4.4 billion in May. Meanwhile, the 12-month trailing trade surplus fell to USD 60.9 billion in June from USD 61.3 billion in the 12 months up to May.
Author: Lindsey Ice, Economist