Taiwan: Exports contract for second consecutive month in December
January 7, 2019
Merchandise exports fell 3.0% in annual terms in December, a slight improvement over November’s 3.4% year-on-year contraction. Despite the weak showing, December’s result nonetheless positively surprised analysts, who had expected a sharper contraction of 5.1% yoy. Furthermore, November export orders—which usually lead actual exports by two to three months—also contracted 2.1% year-on-year, confirming that the ongoing feebleness of Taiwan’s trade sector should persist at least into the first quarter. Following the month’s weak print, growth in the 12-month trailing sum of exports fell from 7.5% in November to 5.9% in December.
As in November, the decline of exports in December came primarily on the back of lower shipments of electronic parts, which account for about a third of Taiwan’s total exports, with the category recording a steeper contraction compared to November. Exports of base metals as well as plastics and rubber also continued to contract in December, albeit at a softer pace than in the previous month. On the plus side, machinery exports rebounded after sharply declining in November, while growth in exports of information, communication and audio-video products picked up significantly.
In terms of regional segmentation, the print was again driven by a sharp and worsening contraction in shipments to Taiwan’s largest export markets—namely, mainland China and Hong Kong, and the ASEAN region , which together account for just under 60% of total merchandise exports. On the other hand, shipments to Europe rebounded in December following November’s slump, and exports to the U.S. accelerated markedly.
Looking at imports, growth modestly accelerated from 1.1% in November to 2.2% in December, due largely to higher imports of electronic parts and mineral products. Growth of the 12-month trailing sum of imports fell from 11.5% in November to 10.6% in December.
Lastly, the trade surplus was stable at November’s USD 4.7 billion in December, while the 12-month trailing trade surplus fell to USD 49.4 billion in December from USD 50.8 billion in November.
Author: Joffrey Simonet, Economist